Crypto Market Rebounds, Ethereum Surges as Risk Appetite Returns

Amidst a broader market recovery, the crypto market experienced a modest gain, with the total market capitalization rising to $2.46 trillion. Bitcoin and Ethereum both showed positive performance, with Bitcoin hovering around $66.75K and Ethereum gaining 2.3% to reach $3,250. Market sentiment remains positive, with the Crypto Fear & Greed Index indicating a "Greed" sentiment. However, Ethereum's decline has been more pronounced, and its price remains below crucial support levels.

Crypto Market Rebounds Amidst Risk Appetite, Ethereum Outperforms Bitcoin

The cryptocurrency market witnessed a modest upswing on Wednesday, driven by a broader recovery in risk appetite across global stock markets. The total market capitalization advanced by 0.5% within a 24-hour period, climbing to approximately $2.46 trillion. This upswing signaled a renewed interest in alternative coins (altcoins) among investors seeking higher returns.

Bitcoin (BTC) Navigates Resistance

Bitcoin (BTC), the bellwether cryptocurrency, exhibited a relatively cautious approach, trading around $66,750 during Wednesday morning. Despite gaining 0.3% over the past day, BTC remained confined within Tuesday's trading range. Market observers noted that BTC was tentatively testing the 50-day moving average (MA), currently at $67,300, but had yet to decisively surpass it for the third consecutive day.

Ethereum (ETH) Leads Altcoin Gains

Ethereum (ETH), the second-largest cryptocurrency, outperformed its larger counterpart, surging by 2.3% over 24 hours to reach $3,250. This surge brought ETH close to its recent highs established in mid-April. Unlike Bitcoin, which has remained relatively stagnant, ETH has experienced a deeper decline in recent months, with its price falling below the support zone formed during March and early April. Currently, ETH trades approximately 6% lower than the 50-day MA that Bitcoin is approaching.

Halving Effects and Regulatory Updates

Analysts at ETC Group attributed the recent crypto recovery to the halving of Bitcoin's block rewards. This event, which reduces the issuance rate of new BTC by 50%, is anticipated to exert a positive impact on the market over time. However, the full effects of the halving are not expected to become fully apparent until approximately 100 days after the occurrence, which falls in August.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has extended its review period for Franklin Templeton's application to launch an Ethereum-based spot exchange-traded fund (ETF). The revised deadline is June 11th, after which the SEC will either approve or reject the new product.

Bitcoin's "DeFi Summer" and Stablecoin Surge

Investment firm Bernstein has drawn parallels between Bitcoin's current performance and Ethereum's "DeFi summer" of 2020, characterized by a surge in decentralized finance (DeFi) applications. Bernstein attributes Bitcoin's activity to the recent launch of the Runes protocol.

Furthermore, data from The Block Data Dashboard reveals that the combined market capitalization of U.S. dollar-pegged stablecoins has reached $165.2 billion, the highest level since June 2022. Tether (USDT) dominates this market, capturing approximately 70% of the total market share.

Binance Faces Legal Challenge

Binance, the world's largest cryptocurrency exchange, is facing a class action lawsuit in Canada. A group of investors alleges that the exchange violated local securities laws by offering unregistered securities. Binance had previously announced that it would cease operations in Canada in May 2023.