Bitcoin (BTC) surged nearly 10% on Tuesday, recovering from its lowest point of the session, while the Nasdaq turned positive after earlier falling almost 2%. Risk markets, which had been under pressure from President Trump’s tariff threats, reacted sharply as the new levies on Mexico, Canada, and China took effect.
Initially, both stocks and cryptocurrencies saw significant losses, but dip-buyers emerged late in the U.S. morning, boosting the Nasdaq to a 0.7% gain as the trading session neared its close. The S&P 500 narrowed its earlier losses to just 0.25%.
At the close of trading, Bitcoin was hovering just above $88,000, marking a 1.5% gain over the past 24 hours. Meanwhile, Ether (ETH) remained flat at $2,171, continuing to underperform relative to its peers.
Bitcoin’s volatile week continued its dramatic swing. The cryptocurrency had plummeted more than 20% from February 21, reaching just above $78,000, before recovering to approximately $95,000 over a three-day stretch. However, the digital asset faced another sharp decline, dipping to the $81,000 range on Tuesday morning.
Crypto-related stocks also showed positive movement, with MicroStrategy (MSTR) up 11%, Coinbase (COIN) gaining 4%, and Marathon Holdings (MARA) climbing 5%.
Potential for Rebound?
Despite a challenging few weeks for risk assets, the downturn could be setting the stage for a potential recovery. Just weeks ago, markets had all but dismissed the possibility of Federal Reserve rate cuts in 2025, and the 10-year Treasury yield was approaching 5%. However, the impact of tariffs, weaker-than-expected economic data, and recent market sell-offs have shifted expectations.
Interest rate traders now predict three or more Fed rate cuts this year, with the first potentially arriving as soon as May. The 10-year Treasury yield has retreated from its January highs of 4.80% to 4.15%. This change in market sentiment suggests a possible rebound for risk assets, including Bitcoin, in the months ahead.
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