Crypto recovery underway after last week's slump

Chris Beauchamp IG

Market snapshot – crypto prices stage a recovery

Last week’s across-the-board rout in crypto assets was the most dramatic we have seen in weeks, with the liquidation on Friday and Saturday the largest on record in dollar terms at over $19 billion. The relentless move lower culminated on Saturday as bitcoin returned to $110,00 and Ether tumbled to a two-month low. But signs of a recovery have been seen in early trading, as the shock of Friday’s Trump post on Truth Social fades and signs of détente emerge in the US-China trade spat.

In the news

The UK has lifted its ban on crypto exchange-traded notes (ETNs), allowing retail investors to buy bitcoin and ether ETNs for the first time through regulated exchanges such as the London Stock Exchange. Such a move marks another step in the broader adoption of crypto assets as another means of wealth-building for the long-term, though the slow pace of regulation will act as a brake in the short-term.

What we’re watching

The slump in stocks has also been reversed to an extent in early Monday trading; much now depends on whether Trump remains focused on the Middle East and leaves China on the back burner for the time being. Earnings season gets underway in earnest too, as US banks report, which will be key for risk appetite in the near-term for both stocks and cryptocurrencies. After the magnitude of the falls in crypto prices, signs of renewed appetite via increased inflows into the space will be closely scrutinised.

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Chris Beauchamp

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Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

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Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.