Bitcoin surpasses $56,000, Solana Developing Comeback From Monday’s Rout

After seeing one of the greatest declines in recent memory during Monday's trading session, Asian equities and futures surged higher on Tuesday.

Early on Tuesday, among a general market rebound in Asia, Bitcoin (BTC) surged above $56,000 as bargain hunters entered the market following Monday's sharp price decline.

A five-day rally was broken when the yen's value lost strength against the US dollar, causing Japan's Topix to jump around 10%. The tech-heavy Nasdaq 100 surged 2.1%, while futures tracking the S&P 500 increased 1.5%. Following Monday's worldwide market decline, there appears to be a renewed optimism about quicker Fed rate cuts, which has improved risk sentiment.

Nevertheless, observers of the cryptocurrency market are still sceptical about a sustained rise in the major tokens.

“We might see a corrective rebound in Bitcoin's price,” Ruslan Lienkha, chief of markets at YouHodler, told CoinDesk in a Tuesday email. “However, this increase will likely be limited due to the prevailing pessimism in the broader markets.”

“Overall, the recent drop in Bitcoin's price is not significantly worse than the decline in the Nikkei index, indicating that the current sentiment is driven by external factors rather than issues within the crypto market itself,” Ruslan said. “It is unclear if we are entering a bearish market, and much will depend on the performance of the equity markets this month.”

On Monday, during a high volume day, institutional investors sold off their spot BTC exchange-traded fund (ETF) holdings. This month's net withdrawals have exceeded $300 million, with the U.S.-listed products recording net outflows of $168.4 million.