Recently, as the increase in the US Consumer Price Index (CPI) in January was higher than expected, investors were worried that the Federal Reserve (Fed) might delay interest rate cuts, and the cryptocurrency market was once in panic. However, after a period of volatility, the market rebounded strongly, with Ethereum (ETH) and Binance Coin (BNB) leading the gains, and the overall market also strengthened, and investor confidence quickly recovered.
Ethereum rises 6%, ETF staking progress becomes catalyst
Ethereum last traded at $2,739, up 6% in the past 24 hours, but still some distance from its high of $3,700 reached in January, according to data from Coingecko.
Min Jung, an analyst at Presto Research, pointed out that the recent rise in Ethereum may be related to Cboe BZX Exchange's application to open ETF pledge function. Cboe recently submitted a 19b-4 document to the U.S. Securities and Exchange Commission (SEC), hoping to amend the terms of 21Shares' Ethereum ETF to allow pledge of Ethereum holdings.
Min Jung said: “A major pain point of the current Ethereum ETF is the inability to participate in staking. If the SEC approves it, this will be a major change.”
The market generally believes that under the impetus of the "Crypto 2.0" policy, the SEC's regulatory attitude will be more friendly than during the period of former Chairman Gary Gensler, which also makes the market full of higher expectations for the approval of Ethereum ETF pledge.
BNB is unstoppable, soaring 12% in a single day
At the same time, BNB has also ushered in a strong rebound, rising 13% in the past 24 hours. The current price has reached US$711, and the market value has exceeded US$102.7 billion, successfully surpassing Solana (SOL) and becoming the fifth largest cryptocurrency by market value.
BTC Markets analyst Rachael Lucas believes that this increase in BNB is more of a "technical rebound." On February 6, BNB plummeted to $500 due to a wave of market liquidations, but considering BNB's past historical trends, $500 may be regarded as a key support level. When market sentiment stabilized, buying quickly poured in, driving a strong rebound in the price of the currency.
In addition, Min Jung also pointed out that Binance has recently listed a number of meme coins (such as TST and CHEEMS), and founder Zhao Changpeng (CZ) has vigorously promoted BNB Chain on social platforms. These factors may also be the key driving force for BNB's rise.
The market digests inflation data and panic sentiment cools down
The cryptocurrency market briefly panicked because the U.S. CPI in January was higher than expected. Data showed that the CPI increased by 0.5% month-on-month, the largest monthly increase in two years, further deepening market concerns that the Federal Reserve may delay interest rate cuts.
However, as the market calmed down, investors' panic gradually eased. Min Jung said: "Although the market reacted violently when the CPI report was released, investors later began to look at the data more rationally, realizing that more economic indicators are needed to confirm the inflation trend."
Rachael Lucas believes that this wave of market rebound is closely related to "algorithmic trading". Trading robots are extremely sensitive to keywords such as the Federal Reserve's statement and CPI data. Once they detect that market sentiment is stable, they will automatically execute buy orders, further pushing up the price of the currency.
Risk assets are recovering, and the market is brewing a new round of gains
Rachael Lucas pointed out that investors have gradually gotten rid of the panic about tariff policies and inflationary pressures and have begun to digest the latest CPI data. The rapid rebound of large currencies also shows that capital confidence is returning. The overall risk asset market is responding positively to the global economic environment. If liquidity conditions continue to improve, the next wave of gains may be accumulating strength.
In addition, Min Jung added that US President Biden recently revealed that Russian President Putin has agreed to discuss the possibility of ending the war in Ukraine. This news further increased the market's risk appetite and pushed asset prices up.
As market sentiment gradually recovers and investor confidence returns, the cryptocurrency market may usher in a new round of rising prices in the future. In this process, mainstream currencies such as Ethereum and BNB may continue to lead the market's rebound trend, and the recovery of other assets is also worth paying attention to.