XRP, BNB Tick Up While Bitcoin Bulls Aim for a $90K Comeback After Market Rout

Bitcoin Recovers to Near $89K as XRP, BNB Lead Market Rebound

Bitcoin (BTC) edged closer to $89,000 in early Asian trading on Wednesday after hitting a 24-hour low of $86,200, offering a slight boost to market sentiment. Major cryptocurrencies showed signs of a recovery, following Tuesday’s sharp sell-off that saw total market capitalization drop by 10% and resulted in at least $1.2 billion in liquidated bullish positions.

Leading the rebound, XRP climbed 3%, while BNB and Solana’s SOL gained 5%. Dogecoin (DOGE) and Cardano’s ADA posted modest 1.2% gains, whereas Tron’s TRX remained in negative territory, declining 5% over the past 24 hours. The CoinDesk 20 Index (CD20), which tracks major digital assets, remained down by 2%.

Tuesday’s market downturn aligned with a CoinDesk analysis, which pointed to a five-month low in sentiment indicators and widespread liquidations, suggesting that assets were likely oversold and could experience short-term relief.

Macro Factors Weighing on Crypto Markets

Tuesday’s sell-off was driven by several macroeconomic factors, including significant outflows from Bitcoin exchange-traded funds (ETFs), with investors pulling over $1 billion in the past two weeks. Additionally, a strengthening Japanese yen—a traditional safe-haven asset—has put pressure on riskier investments like cryptocurrencies.

Despite these headwinds, expectations for looser monetary policy in the U.S. are on the rise. Markets now estimate a 30% chance of an interest rate cut in May, up from previous weeks, while the probability of two cuts by June has tripled to 15%. These expectations were fueled by a sharp decline in U.S. consumer confidence, which dropped by 7 points in February to 98.3, marking its third consecutive monthly decrease. Historically, shifts in U.S. economic policy and retail investor activity have influenced Bitcoin and broader crypto market trends.

Meanwhile, gold, which had recently surged to an all-time high, fell 1.3% on Tuesday due to profit-taking but rebounded slightly during Asian trading hours on Wednesday.

Cautious Optimism Among Crypto Traders

While some traders anticipate further upside for Bitcoin, enthusiasm for altcoins remains subdued. BTC dominance continues to rise, indicating that fresh capital inflows are primarily directed toward Bitcoin rather than altcoins.

Bitcoin briefly broke below the $90K mark for the first time in a month, triggering over $200 million in liquidations in the past few hours. Market sentiment remains fragile, particularly following new trade restrictions imposed by the Trump administration, including tariffs on Canada and Mexico and restrictions on Chinese investments.

“Despite recent market volatility, equities, fixed income, and gold have mostly brushed off concerns that previously weighed on risk assets,” noted Singapore-based QCP Capital in a Tuesday report. “BTC’s rising dominance and declining altcoin prices suggest that most altcoin bulls are already fully allocated, with any new liquidity entering the market flowing exclusively into BTC.”

QCP Capital further cautioned that Bitcoin’s recent surge has been largely driven by institutional buyers, such as Strategy (formerly MicroStrategy), which have financed purchases through equity-linked debt offerings. Crypto-related financing now represents approximately 19% of total market issuance over the past 14 months. However, with limited room for further equity-based financing, institutional demand could weaken if Bitcoin prices remain stagnant.

Institutional players like Strategy have been instrumental in driving BTC demand, leveraging stock sales to fund their acquisitions. However, as market enthusiasm plateaus, companies may find it increasingly difficult to justify further Bitcoin purchases. A slowdown in institutional buying could dampen market momentum, potentially leading to further corrections in BT