Bitcoin and Ethereum rebound as fresh capital floods crypto

Bitcoin and Ethereum saw a strong rebound this week as fresh capital returned to the crypto markets following the US-China rate shock.

Bitcoin rose above $110,000 for the first time since early October, reaching around $111,000 at the time of writing. CryptoSlate facts. The move marks a daily gain of 4% and reverses some of the losses that followed President Donald Trump’s announcement of new tariffs on Chinese imports.

Ethereum also broke the $4,000 mark for the first time in weeks, up more than 4% to around $4,045, a level traders consider technically significant.

Notably, other major digital assets joined the market momentum with their own rally.

According to Crypto Slates data, BNB,

‘Buy the dip’

The current upswing can be linked to the current ‘buy the dip’ sentiment pervading the market.

Specifically, the on-chain data maintained by the blockchain analytics platform Lookonchain indicates that more than $6 billion worth of new Tether’s USDT and Circle’s USDC stablecoins have entered circulation since last week.

The issuance of stablecoins often precedes renewed spot purchasing activity. In this case, it appears that capital is moving from cash to dollar-pegged tokens to finance token accumulation.

Meanwhile, sentiment reflects trends in traditional markets.

Facts The Kobeissi Letter, citing Bank of America, shows that US stock investors bought $3.9 billion worth of shares last week after three straight weeks of outflows.

Analysts at the firm pointed out that net inflows into individual stocks were $4.1 billion, the fifth highest since 2008 and the largest ever in a week when the S&P 500 fell at least 1%.

They added:

“This was driven by institutional inflows of +$4.4 billion, the highest since November 2022. Retail investors bought +$1.1 billion, which was their second weekly purchase in the last six.”

The market remains wary

Despite the upturn, Bitwise’s Cryptoasset Sentiment Index still remains relevant signals a broadly bearish stance, with readings consistent with what analysts call a “high-risk, high-reward” setup for Bitcoin.

However, the asset manager’s intraday sentiment model is now showing a bullish divergence, which is an early sign of a near-term reversal.

Analysts at Galaxy Research echoed strikes a cautiously optimistic tone, writing that while last week’s sudden crash has “made a meaningful dent in asset prices”, the broader picture “remains constructive”.

They wrote:

“Bitcoin remains well-positioned as digital gold to benefit from fundamental doubts about government fiscal and monetary prudence, while the rise of tokenization and stablecoins coupled with extremely favorable US regulatory prospects should support the prospects of other key digital assets such as ETH and SOL.”