The cryptocurrency market saw a 1.59% increase over the past 24 hours, supported by positive regulatory factors and an increased risk appetite among investors due to general economic developments. Although weekly returns remain negative (-2.82%), today's gains align with an upward trend over 30 days (+12.92%) and are correlated at 0.86 with the QQQ index, which includes major tech companies. The main factors behind market movement over the past 24 hours are:
U.S. SEC approval of Liquid Staking – The commission clarified that liquid staking receipt tokens are not securities, opening the door for institutional participation in decentralized finance (The Defiant).
Federal Reserve interest rate cut expectations – Shifts linked to President Trump and weak labor market data have increased expectations for a rate cut in September, supporting risk assets.
Institutional entry into the market – Nomura’s Laser Digital obtained a license to trade cryptocurrency options in the UAE, reflecting regulatory progress (CryptoSlate).
Detailed Analysis
1. Regulatory clarity on Staking (positive impact)
Overview: Guidance from the U.S. Securities and Exchange Commission confirming that liquid staking tokens are not securities if driven by the protocol removes a major obstacle for institutions. This directly impacts the TVL (total value locked) in liquid staking on the Ethereum network, which stands at $24 billion, and platforms like Aave.
What this means: Capital flows are expected to increase towards staking derivatives and decentralized finance protocols that offer yield products.
What to watch: ETF flows based on ETH, which increased by $73.2 million yesterday despite outflows from BTC.
2. Economic policy shifts (mixed impact)
Overview: Federal Reserve members indicated a potential interest rate cut amid slowing labor market data, with markets expecting a 60% chance of a cut in September. However, the correlation between digital currencies and stocks remains high (QQQ at 0.85), exposing digital currencies to Nasdaq market volatility.
What this means: Low interest rates may support the continued rise of digital currencies, but reliance on stocks creates downside risks if economic data disappoints.
3. Increased demand for derivatives (positive impact)
Overview: The open interest in Perpetual contracts increased by 14.28% over the past 24 hours, with funding rates rising by 129%, indicating leveraged buy positions. Bitcoin liquidations decreased by 57%, reducing market pressure risks.
What this means: Renewed speculative interest, but high leverage (averaging 75 times on Bitcoin futures contracts on Binance) could intensify corrections.
Summary
Today's market rise reflects a convergence of regulatory progress, economic optimism, and momentum from derivatives. While SEC positions on staking and institutional expansion (like Nomura in the UAE) provide structural support, traders should monitor the U.S. jobs report on Friday for indications on interest rates. Will Bitcoin be able to maintain support at $114,000 if stocks retreat again after Nvidia's results?
