Bitcoin and a majority of altcoins made a significant recovery on Friday, as investors took the opportunity to buy following a disappointing report on consumer confidence.
Ripple (XRP) saw a notable increase of 4%, while Chainlink (LINK), Bonk (BONK), and JasmyCoin (JASMY) surged by over 5%.
This upward movement comes on the heels of a report indicating that U.S. consumer confidence has plummeted to its lowest point in two years. Many consumers are expressing concerns regarding tariffs and their potential inflationary effects.
Additionally, worries persist over ongoing job cuts linked to efficiency initiatives that may affect the economy. Consequently, there are fears that the U.S. could be edging toward a recession.
Historically, risky assets tend to perform well in recession scenarios, especially due to Federal Reserve interventions. The Fed has typically reacted to significant economic events by lowering interest rates and adopting quantitative easing measures.
Recent indications suggest that the Fed may consider further interest rate cuts during its meeting next week, coinciding with a decline in both the U.S. dollar index and U.S. bond yields.
This atmosphere of expected rate cuts contributed to a rally in U.S. stocks on Friday. The Dow Jones Index soared by 625 points, while the S&P 500 and Nasdaq 100 rose by 102 and 400 points, respectively. The Russell 2000, which represents small-cap companies, advanced by over 3%. Notably, gold prices surged to a historic high of $3,000 for the first time.
XRP, LINK, BONK, JASMY surge as U.S. government shutdown averted
Altcoins including XRP, LINK, BONK, and JasmyCoin also experienced gains amid signs that the U.S. government is likely to avoid a shutdown. In a recent opinion piece, a prominent senator pointed out that a government shutdown could primarily benefit certain influential figures advocating for reduced government spending.
Moreover, the recent uptick in these cryptocurrencies can be attributed to investors seeking bargains, especially as many coins remain over 30% below their peak levels recorded in December. An analysis highlighted a general market sentiment regarding the need to find a stable bottom for investments.
“Nearly everyone is looking for a bottom and to ‘buy the dip’ at some point, but the current condition of the markets has not implied any real improvement on a technical basis – the tape is simply very oversold at this stage.”
Nevertheless, there remains a cautionary note that the current recovery in stocks and altcoins may represent a temporary bounce rather than a sustained turnaround. A dead cat bounce occurs when an asset undergoing a downtrend bounces back briefly before continuing its decline.
