Cryptocurrencies stabilized after Monday’s sharp sell-off, with bitcoin bouncing above $87,000 at the start of the US session on Tuesday.
The largest cryptocurrency is up about 3% from overnight lows, while ether underperformed, with just a 1.4% lead. Top altcoins including BNB , , showed relative strength, gaining between 3% and 6% overnight.
Cryptocurrency-related stocks also recovered after Monday’s panic action. Treasury firm Bitcoin Strategy (MSTR) and digital brokerage Robinhood (HOOD) rose between 3% and 4%, while Circle (CRCL), issuer of the $78 billion USDC stablecoin, jumped 9%.
In a rare case, cryptocurrencies are outperforming U.S. stocks, which fell modestly across the board on Tuesday, with the S&P 500 down 0.5% and the Nasdaq down 0.3%.
In the news were the delayed US employment reports, with November data showing a worrying jump in the unemployment rate to a four-year high of 4.6%. At the moment, the weakness is not flowing into traders’ expectations of a Fed rate cut in January, which remain weak with a probability of just 24%.
Dead cat bounce or something else?
Tuesday’s initial action could offer some hope that bitcoin’s slide from last week’s high above $94,000 has stopped in the near term, but at least one analyst sees BTC hitting new lows soon.
Samer Hasn, senior market analyst at brokerage
In a market note on Tuesday, it described the current environment as “fragile”, with derivatives markets underlining caution. Then, $750 million in long liquidations occurred in the last two days, including $250 million tied to bitcoin futures, he noted.
“Traders are stepping aside ahead of the data or being forced to retreat, reinforcing bearish momentum,” Hasn said. “Without a positive macro catalyst to reset sentiment, bitcoin remains exposed to a deeper rally, with levels below 80,000 becoming more of the near-term conversation rather than a tail risk.”
“The market now faces a short-term battle between the delay in monetary easing and the long-term appeal of BTC as a store of value,” said David Hernandez, crypto investment specialist at 21shares. “Immediate selling pressure may arise as traders reassess the risk outlook, forcing BTC to defend key support zones,” he continued. “However, underlying economic stress reinforces the bullish case for smart money accumulation: as the Federal Reserve struggles to control inflation without collapsing the economy, the finite supply of bitcoin becomes an essential asset.”
