News/Cointelegraph/Decoding the Rise in Cryptocurrency Market Today: Key Factors at Play 2 min read
BTCUSD,ETHUSD Today’s main insights:
The cryptocurrency market has surged by 2.5% today, May 8, pushing the market cap above the $3 trillion mark for the first time in over two months. The Federal Reserve’s consistent rates and mounting stagflation concerns have enhanced Bitcoin’s appeal as a value reserve. The expected US-UK trade agreement and a market recovery are driving optimism.
Today’s cryptocurrency market surge has pushed the total market cap up by about 2.5% in the past 24 hours, hitting $3.06 trillion on May 8. The surge was primarily led by Bitcoin BTCUSD and Ether ETHUSD, which saw increases of about 2.3% and 4% respectively.
The decision of the Federal Reserve to maintain interest rates between 4.25%-4.50% on May 7 has strengthened the appeal of cryptocurrencies. Jerome Powell, the Fed Chair, in his remarks post-meeting, underscored the risk of stagflation — a combination of slow economic growth and persistent inflation — partially triggered by Trump’s tariff policies.
Bitcoin, often referred to as “digital gold,” stands as a store of value in such circumstances. As investors grow wary of inflation impacting fiat currencies, they are increasingly turning towards Bitcoin, similar to the 2020 monetary easing period that triggered a crypto rally.
Expectations of the US-UK trade deal are also fuelling market positivity. The Trump administration has expressed a favourable stance towards cryptocurrencies, and an imminent trade pact with the UK has been hinted at. Trump stated on May 7 via a Truth Social post that a “major trade deal” with a “big, highly respected, country” is due for announcement on May 8. The New York Times has identified the country as the UK, according to three informed sources.
The potential US-UK deal could signify a reduction in global trade tensions, thereby stimulating risk appetite across markets, including cryptocurrencies. Following this announcement, Bitcoin experienced a 4% rise, continuing a week-long rally as macroeconomic conditions improve.
From a technical standpoint, the combined market cap of all cryptocurrencies, represented by TOTAL, reflects a rebound that began at the $2.4 trillion support level. It has since rallied 30% to cross the $3 trillion mark for the first time in two months. It’s noteworthy that the 200-day simple moving average (SMA) is currently at the same level.
The last time the market cap exceeded $3 trillion was on March 3 before a tariff-induced sell-off brought it down to $2.27 trillion on April 7. The TOTAL market cap, now at $3.03 trillion, is looking to break the resistance zone between $3.1 trillion and $3.25 trillion. If this happens, it would indicate the bulls’ ability to maintain the uptrend, with the all-time highs above $3.69 trillion in their sights.
The daily RSI has steadily climbed from oversold conditions at 30 on April 7 to the current level of 68, suggesting that the bullish momentum is gaining pace.
This article does not offer investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
