Cryptocurrencies stabilized after a sharp sell-off on Monday, with Bitcoin It rebounded above $87,000 in early trading on Tuesday in the United States.
The largest cryptocurrency is up about 3% from overnight lows, while Ethereum Underperforming, only leading by 1.4%. Altcoins mainly include BNB , , Showing relative strength, it rose 3% to 6% overnight.
Cryptocurrency-related stocks also rebounded after Monday’s panic moves. Bitcoin funding company Strategy (MSTR) and digital brokerage Robinhood (HOOD) rose 3%-4%, while Circle (CRCL), which issues the $78 billion USDC stablecoin, rose 9%.
In a rare occasion, cryptocurrencies outperformed U.S. stocks, which edged lower across the board on Tuesday, with the S&P 500 down 0.5% and the Nasdaq down 0.3%.
The news included a delay in the release of the U.S. jobs report, with November data showing a disturbing jump in the unemployment rate to a four-year high of 4.6%. For now, this weakness has not affected traders’ expectations for a rate cut by the Federal Reserve in January, with the likelihood of a rate cut remaining slim at 24%.
Dead cat bounce or something else?
Tuesday’s early moves may provide some hope that Bitcoin’s decline from last week’s high above $94,000 has been contained in the short term, but at least one analyst believes BTC will soon hit new lows.
Samer Hasn, senior market analyst at brokerage
In a market report on Tuesday, he described the current environment as “fragile,” with derivatives markets underlining caution. He noted that there have been $750 million in long liquidations over the past two days, $250 million of which was related to Bitcoin futures.
“Traders either exited ahead of the data or were forced out, exacerbating the downside momentum,” Hasson said. “Without a positive macro catalyst to reset market sentiment, Bitcoin remains exposed to deeper shocks, with sub-80,000 levels increasingly becoming part of the near-term discussion rather than a tail risk.”
“The market now faces a near-term battle between a delay in monetary easing and the long-term appeal of BTC as a store of value,” said David Hernandez, cryptocurrency investment expert at 21shares. “As traders reassess the risk landscape, there could be immediate selling pressure forcing Bitcoin to defend key support areas,” he continued. “However, underlying economic tensions reinforce the bullish thesis for smart money accumulation: Bitcoin’s limited supply makes it an important asset as the Federal Reserve works to curb inflation without destroying the economy.”