Bitcoin Surpasses $56K, Solana Leads Recovery

Bitcoin (BTC) rose above $56,000 earlier in the day as the market in Asia recovered following yesterday’s sharp price drop.

CoinGecko data shows that BTC is up 6%, its biggest 24-hour price increase since May. Ether (ETH) and XRP are up 8%, BNB Chain’s BNB is up 12%, and Solana’s SOL is up 16%.

Japan’s Topix index rose nearly 10%, a five-day gain, as the yen weakened against the U.S. dollar. Futures tracking the S&P 500 rose 1.5%, while the tech-heavy Nasdaq 100 added 2.1%. Risk sentiment was boosted by renewed hopes the Fed will hurry to cut interest rates after yesterday’s global stock market decline.

Still, crypto market watchers remain cautious about the rally in major tokens.

“We could see a significant recovery in Bitcoin’s price,” said Ruslan Lienkha, head of markets at YouHodler. “However, this increase is likely to be limited due to the pessimism that prevails in the markets in general.”

“The recent decline in Bitcoin’s price is not worse than the decline in the Nikkei index, which suggests that current sentiment is driven by external factors rather than internal issues in the crypto market. It is not clear whether we are entering a bearish period, and much will depend on the performance of equity markets this month.”

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Yesterday, the crypto market and global stock markets suffered one of their deepest losses in recent years. The strengthening Japanese yen accelerated the sell-off that began last week due to geopolitical tensions in the Middle East, triggering losses for carry traders.

Japan’s Topix 100 index fell by the most since 2011. Bitcoin’s yen-denominated price on Tokyo-based bitFlyer exchange fell by about 15%, more than its dollar-denominated price on Western exchanges.

US-listed bitcoin ETF products recorded net outflows of $168.4 million yesterday.