Cryptocurrency markets experienced a mixed start to the week, with Bitcoin’s recent upward momentum losing steam during Monday’s U.S. trading hours amid lingering investor caution. While Bitcoin (BTC) hovered just above $111,000 — marking a near 2% increase over 24 hours but falling short of earlier peaks — other assets painted a different picture.
Ether (ETH) slipped slightly, dipping just below the $4,000 threshold and registering a modest 0.2% decline on the day. In contrast, XRP and Chainlink (LINK) emerged as notable performers within the CoinDesk 20 Index, with XRP reaching $2.4675 and LINK trading at $18.78. Privacy-oriented token Zcash (ZEC), which is not part of the index, stood out with a remarkable 17% rally, surging to around $240.21.
Crypto-related equities mirrored the weekend’s relief rally, mostly trending higher on Monday. Bitcoin mining companies Riot Platforms (RIOT) and Marathon Digital Holdings (MARA) saw their shares increase by nearly 10% and 6%, respectively. Meanwhile, Galaxy Digital (GLXY), a diversified crypto investment firm, gained about 5%.
Despite this optimism, the Crypto Fear & Greed Index remains entrenched in “fear” territory, reflecting ongoing anxiety among market participants. Some analysts have sounded warnings about a possible end to the ongoing bull phase and anticipate deeper market corrections. Yet, digital asset investment firm Arca took a contrasting stance in a note published Monday.
Arca’s research team argued that the intense selloff earlier this month should not be viewed as a market collapse but rather as a period of recalibration. They described episodes like the October 10 dip and subsequent leveraged liquidations as unsettling but emphasized that the crucial focus should be on how the market responds afterward. According to Arca, key metrics indicate that recovery processes are underway.
The firm highlighted several encouraging signs pointing to structural stability. Exchange trading volumes have risen approximately 15% week-over-week, while open interest for decentralized perpetual contracts is building again, signaling renewed trader engagement. Additionally, liquidity conditions appear to be improving, which supports smoother market functioning.
On the macroeconomic front, Arca pointed out that pressures are easing. Stress within the U.S. regional banking sector seems to have diminished following the recent periods of turbulence. Usage of the Federal Reserve’s emergency liquidity facilities dropped to zero last Friday, and high-yield credit spreads have tightened, both of which suggest more stable financial conditions.
Summarizing their outlook, Arca noted, “We have witnessed similar scenarios multiple times and are not inclined to be bearish in response to what appears to be a temporary structural disruption.” They further maintained that the ongoing rebound should not be dismissed as merely a “dead cat bounce,” but rather as a substantive recovery process.
As crypto markets navigate these mixed signals, investors are carefully monitoring price action and broader economic developments to gauge whether this phase marks a sustained resurgence or a prelude to further volatility.
