Bitcoin climbed back above $90,000 during Tuesday’s US morning hours, erasing most of its steep plunge from Sunday to Monday to below $84,000. The largest cryptocurrency recently traded at $91,180, up 8% over the past 24 hours, helping to lift the broader digital asset markets.
Ethereum’s Ether jumped over $3,000 and rose 9% over the same period. Large-cap altcoins also followed the progress: Solana’s SOL , were up 7-10%, recovering from their recent lows.
The gain came as $11 trillion asset management giant Vanguard dropped its long-standing fatwa against crypto and will now give its clients access to digital asset ETFs. Next to Bank of America have given okay for its asset managers to recommend a 1%-4% allocation to spot bitcoin ETFs.
Japanese interest rate shock could hit bitcoin hard, analyst warns
Mark Connors, founder and chief macro strategist of bitcoin investment consultancy Risk Dimensions and former global head of risk advisory at Credit Suisse, warns that a rise in Japan’s 10-year yield could draw capital away from global markets, where crypto – particularly bitcoin – is hit hardest due to its proximity to Asian capital flows and exposure to leverage. Binance, which handles nearly half of all crypto volume and allows leverage of up to 50x, is particularly vulnerable to yen and yuan volatility.
Connors also pointed out that bitcoin appears to be leading the S&P 500 lower. That pattern could continue until both the Federal Reserve and the Bank of Japan hold their policy meetings later this month. If the markets weaken further, he expects some form of intervention, as has often happened during periods of stress in recent years.
Yet not all signals point to weakness. Jasper De Maere, desk strategist at Wintermute, said bitcoin derivatives are showing a “clear tilt toward bullish, short-vol behavior.” Traders are selling bearish rates around the $80,000-$85,000 level while selectively buying upside and downside further out.
“The mix suggests a market that treats $80,000-85,000 as supported and is comfortable leaning well into the end of the year while earning carry on the way,” De Maere said. In other words, despite near-term pressures, traders appear to be positioned for a recovery.
Read more: On Thin Ice: Crypto Diary Americas
