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▲ Ethereum (ETH), Solana (SOL)/ChatGPT generated image ©
The cryptocurrency market rebounded by 1.32% in a single day, recovering its market capitalization to $2.13 trillion. This surge was driven by the strength of major Layer 1 ecosystems, particularly Ethereum (ETH) and Solana (SOL), rather than a sharp rise in Bitcoin (BTC), with a renewed preference for risk assets across the market cited as the key underlying factor.
According to CoinMarketCap, a cryptocurrency market data aggregator, on July 3 (local time), the total cryptocurrency market capitalization rose by 1.32% over 24 hours, reaching $2.13 trillion. The uptrend was led by major Layer 1 ecosystems such as Ethereum, Solana, and BNB Chain. The Ethereum ecosystem surged by 15.15%, the Solana ecosystem by 23.34%, and the BNB Chain ecosystem by 28.49%, indicating a shift of market funds towards large-cap altcoins.
The media outlet identified the circulation of funds into major altcoin ecosystems as the primary reason for this rise. It explained that market participants' preference for risk assets expanded as they focused on buying large Layer 1 projects with strong fundamentals and ecosystems, rather than highly speculative memecoins. However, for this trend to continue, Ethereum must maintain its recent 7-day high, and the number of rising assets across the market must continue to expand, the analysis stated.
The macroeconomic environment also played a favorable role in the market. Kevin Warsh, former Federal Reserve (Fed) governor, mentioned the possibility of easing inflation, suggesting that the likelihood of further benchmark interest rate hikes could decrease, which supported investor sentiment. Additionally, Bitcoin's 2.7% rise over the past week kept the market's center stable, providing a foundation for funds to spread to altcoins, the outlet explained.
However, the analysis suggests that it is still necessary to confirm whether this rebound will lead to a sustained uptrend. The media outlet assessed that the overall cryptocurrency market capitalization must break through the $2.18 trillion resistance level for the uptrend to fully materialize. Conversely, if it falls back below $2.04 trillion, this rebound could end in failure, increasing the possibility of retesting year-lows.
The biggest variable for the market moving forward is the US Consumer Price Index (CPI) to be announced on July 10. The outlet predicted that since this rise reflects expectations of easing inflation, if the CPI comes out higher than market expectations, the current preference for risk assets could quickly weaken. Ultimately, for this rebound to be sustained, the improvement in the macroeconomic environment combined with the continued upward momentum of major altcoins will be a key factor, the analysis concluded.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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