The cryptocurrency market experienced a notable recovery rally on Monday, bolstered by positive developments in both traditional financial markets and favorable economic data from China. Major cryptocurrencies surged, propelled by Bitcoin’s impressive climb beyond the $111,000 mark, ultimately reaching $111,373.90. This 3.7% increase in just 24 hours followed a dip to $103,602 last week, igniting optimism among investors and traders alike.
As Bitcoin typically dictates market trends, the rally inspired gains across leading altcoins. Ether, XRP, Solana, BNB, and Dogecoin recorded increases between 3% to 5%, lifting the CoinDesk 20 Index by 3.6% to reach 3,685 points. Analysts noted a shift in the RVT ratio for Bitcoin, a significant indicator that measures the ratio between Realised Cap and on-chain transaction value. The decline in the RVT ratio suggests heightened usage and transfer of Bitcoin, signaling potential bullish momentum. According to crypto analytics platform Alphractal, such declines have historically preceded significant bull phases.
Amid this positive backdrop, major players in the cryptocurrency market are making moves. Michael Saylor, executive chairman of a leading institutional BTC holder, hinted at potential fresh purchases over the weekend, further enhancing confidence in Bitcoin’s future growth.
Support from traditional markets has added an extra layer of encouragement for cryptocurrency investors. Japan’s Nikkei index soared above 49,000 points for the first time, achieving a year-to-date gain of 25%. This bullish trend is attributed to reports that Sanae Takaichi, a proponent of the Abenomics policy, will assume the role of Prime Minister. Abenomics, which promotes low interest rates and expansionary fiscal policies, seems to be gaining renewed traction as the Federal Reserve signals potential rate cuts by the end of the year. Such monetary policy changes could favor risk-on assets, including cryptocurrencies.
In tandem, Chinese equities also showed promise, climbing 0.90% following third-quarter GDP figures that surpassed expectations. China’s GDP grew by 4.8% year-on-year, slightly exceeding the forecast of 4.7%, while the quarter-on-quarter growth rate also performed better than anticipated. This data strengthens confidence in the Chinese economy and supports global market sentiment.
Conversely, the dollar index dipped to 98.40, enhancing the investment appeal of dollar-denominated assets like Bitcoin. Meanwhile, gold prices remained stable at approximately $4,250, suggesting a period of exhaustion in its uptrend, which has historically preceded renewed bullish phases for Bitcoin.
Overall, the combined effects of improved economic indicators, strategic market movements, and a supportive environment for cryptocurrencies represent a significant shift that could echo positively for the digital asset space in the near future.
