Bitcoin and crypto markets experienced a robust recovery Tuesday, with Bitcoin surging past the $56,000 mark and Ethereum breaking above $2,500, bouncing back from the “Block Monday.” Yesterday, Bitcoin plummeted over 15%, touching lows near $49,000, while Ethereum dropped by more than 20% to a low of $2,115. The recovery in Bitcoin and crypto paralleled a broader resurgence in global financial markets, driven by several key factors.
#1 Nikkei Rebounds, Bitcoin Follows
Japan’s primary stock index, the Nikkei 225, experienced a record-breaking recovery following its most significant drop since the 1987 Black Monday crash. The index surged by 10.23%, closing at 34.675,46 points. This rebound came after a sharp 12.4% decline on Monday, spurred by global market instability and looming recession fears in the US, alongside complications arising from the unwinding of the Yen ‘carry trade.’
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Popular crypto analyst JACKIS (@i_am_jackis) remarked via X: “I think that crypto right now is reacting to macro conditions but nothing specific IMO is happening to crypto itself. Here is BTC & Nikkei in comparison. When macro conditions settle Bitcoin / crypto should rebound stronger but until then be careful.”
#2 ISM Services Data Is Bullish
The US Institute for Supply Management reported on Monday that its non-manufacturing PMI rose to 51.4 in July from June’s 48.8, which was the lowest since May 2020. This index measures the health of the services sector, which constitutes over two-thirds of the US economy. A PMI above 50 suggests expansion, and the latest data indicates a rebound in service sector activity, easing some concerns over an impending recession.
Eric Wallerstein of Yardeni Research expressed relief and cautious optimism about the data: “Woah, maybe the US economy is not crashing? ISM services employment up 5 points to 51.1. Entire PMI in expansion,” he stated via X.
Andreas Steno Larsen of Steno Research also commented, highlighting the precariousness of market sentiment: “ISM Services away from the recession zone again. Not sure it is strong enough to convince Markets. We are not trading macro currently. We are trading leveraged stops.”
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Ram Ahluwalia, CEO of Lumida Wealth, added: “ISM Services are *up* reversing the signal from the ISM Manufacturing data last Friday. No recession folks. This is a technical / positioning driven…
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