Bitcoin and Ethereum rebound as fresh capital floods crypto

Bitcoin and Ethereum staged a strong rebound this week as fresh capital returned to crypto markets following the US–China tariff shock.

Bitcoin surged past $110,000 for the first time since early October, reaching roughly $111,000 as of press time, according to CryptoSlate data. The move marks a 4% daily gain and reverses some of the losses that followed President Donald Trump’s announcement of new tariffs on Chinese imports.

Ethereum also broke through the $4,000 barrier for the first time in weeks, up more than 4% to around $4,045, a level that traders view as technically significant.

Notably, other major digital assets joined the market momentume with their own rally.

According to CryptoSlate’s data, BNB, XRP, Solana, Dogecoin, Tron, and Cardano each climbed between 5% and 8%, signaling a broad-based resurgence rather than a Bitcoin-only bounce.

‘Buy the dip’

The current uplift can be linked to the current “buy the dip” sentiments pervading the market.

Notably, on-chain data tracked by blockchain analysis platform Lookonchain indicates that more than $6 billion in new Tether’s USDT and Circle’s USDC stablecoins have entered circulation since last week.

Stablecoin issuance often precedes renewed spot buying activities. In this case, capital appears to be rotating from cash sidelines into dollar-pegged tokens to fund token accumulation.

Meanwhile, the sentiment mirrors trends in traditional markets.

Data from The Kobeissi Letter, citing Bank of America, show that US equity investors bought $3.9 billion in stocks last week after three consecutive weeks of outflows.

Analysts at the firm pointed out that net inflows to single stocks hit $4.1 billion, the fifth-highest since 2008 and the largest on record for a week when the S&P 500 fell at least 1%.

They added:

“This was driven by institutional inflows of +$4.4 billion, the most since November 2022. Retail investors bought +$1.1 billion, marking their 2nd weekly purchase out of the last 6.”

Market remains wary

Despite the uptick, Bitwise’s Cryptoasset Sentiment Index still signals a broadly bearish posture, with readings consistent with what analysts call a “high-risk, high-reward” setup for Bitcoin.

However, the asset manager’s intraday sentiment model now shows a bullish divergence forming, which is an early sign of a short-term reversal.

Analysts at Galaxy Research echoed this cautiously optimistic tone, writing that while last week’s flash crash “put a meaningful dent in asset prices,” the broader setup “remains constructive.”

They wrote:

“Bitcoin remains well positioned as digital gold to capitalize on fundamental doubt about government fiscal and monetary prudence, while the rise of tokenization and stablecoins coupled with an extremely favorable U.S. regulatory outlook should buoy the prospects of other important digital assets like ETH and SOL.”