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Ethereum leads fragile crypto rebound as markets navigate holiday thin liquidity
Anndy Lian
Ethereum leads fragile crypto rebound as markets navigate holiday thin liquidity
While traditional US financial markets are closed for the Presidents’ Day holiday, the cryptocurrency market continues to operate relentlessly. Global equity futures trade with light volumes, constrained further by Lunar New Year closures across mainland China and Hong Kong. Yet crypto never pauses.
The total market capitalisation rose 0.74 per cent over twenty-four hours to reach US$2.36 trillion. This modest gain reflects a market searching for direction amid thin liquidity and conflicting signals. My view is that this movement represents not a decisive turnaround but a fragile, technical rebound driven by specific ecosystem dynamics rather than broad macroeconomic conviction.
Ethereum’s relative strength provided the primary catalyst for today’s advance. The Ethereum Ecosystem category climbed 1.16 per cent, notably outpacing the broader market’s 0.74 per cent gain. This outperformance follows recent commentary from Vitalik Buterin, emphasising Ethereum’s base-layer neutrality, and from Coinbase CEO Brian Armstrong, noting that retail investors continue to accumulate ETH with diamond hands.
After six consecutive red monthly candles and a period of historic underperformance, Ethereum appears to be executing a technical bounce from deeply oversold conditions. The narrative surrounding the protocol has shifted subtly toward constructive long-term fundamentals, which seems to have encouraged spot buyers to step in at current levels.
However, this rebound remains precarious. Ethereum must maintain a price above the psychological US$2,000 threshold to sustain momentum. A failure to hold that level could swiftly erase today’s gains and reintroduce downward pressure. #USCoreCPIHitsFour-YearLow BREAKING: US Core CPI Hits Four-Year Low, Inflation Pressures Ease Significantly 🔥
Latest data shows the US January core Consumer Price Index (CPI) rose just 2.5% year-over-year, marking its lowest level since early 2021! Headline CPI also slowed to 2.4% , coming in below expectations. This signals a key turning point in the high inflation that has plagued the US economy for years.
📊 Data Highlights:
Core CPI: +2.5% YoY (vs 2.6% previous) — weakest in four years
Headline CPI: +2.4% YoY (vs 2.7% previous) — lowest since May 2025
Monthly Figures: Headline CPI rose just 0.2%, Core CPI up 0.3%
🔍 Reasons for the Cooldown:
A 1.5% drop in gasoline prices and a 1.8% decline in used car prices were major contributors. Notably, shelter costs, which carry significant weight in the CPI, rose only 0.2% month-over-month, with the annual increase slowing to 3% , indicating housing inflation is fading. However, airfare prices surged 6.5% in a single month, becoming the sole "hot spot."
💡 Impact on Markets:
1️⃣ Fed Policy Expectations Heat Up
Market expectations for rate cuts this year have intensified — traders now price in a total cut of approximately 63 basis points for 2026, equivalent to more than two rate cuts. A PIMCO economist noted: "The Fed should feel more comfortable in its decision-making on rate cuts."
2️⃣ Bond Market Reacts Positively
Treasury prices rose, pushing the 10-year yield toward the 4% threshold, while the 2-year yield approached its lowest level since 2022.
3️⃣ Ripple Effects Across Asset Classes
Dollar: Likely to soften modestly, which could benefit commodities and emerging markets
Risk Assets: Typically benefit from a slowing inflation environment
Gold/Silver: Spiked briefly following the data release
⚠️ Warning Signs to Watch:
Despite the overall positive trend, prices for goods like furniture (up 0.7%), household appliances (up 1.3%), and clothing (up 0.3%) continued to rise, suggesting the pass-through effects of the Trump administration's tariff policies are still present. Economists caution: "We wouldn't want to rule out potential price pressures, especially as trade patterns are normalizing." 🇺🇸 Crypto market prediction ahead of U.S. Supreme Court tariff decision on Feb 20
Crypto markets are heading into a potentially volatile week as investors brace for the U.S. Supreme Court’s tariff decision scheduled for Feb. 20.
The ruling could determine the legality or scope of contested trade measures, a development that may ripple across equities, commodities, foreign exchange and, increasingly, digital assets.
🔸 U.S. Supreme Court tariff decision looms over risk assets
Tariff decisions tend to influence broader macro sentiment rather than crypto directly. In past episodes of trade tension, markets initially reacted with a risk-off tone, strengthening the U.S. dollar and pressuring equities.
Crypto has historically responded in two phases: an immediate liquidity-driven pullback alongside other risk assets, followed by a divergence when investors rotate toward alternative stores of value.
During earlier trade escalations, Bitcoin fell in tandem with stocks before stabilizing as dollar strength faded. The key transmission channel has often been the U.S. Dollar Index (DXY).
A stronger dollar tightens global liquidity, which can weigh on speculative assets such as cryptocurrencies. Conversely, dollar weakness has tended to support risk appetite.
🔸 Crypto market prediction
From a technical standpoint, the crypto total market cap (TOTAL) sits near $2.32 trillion after a sharp early-February decline toward the $2.1 trillion region. The daily RSI is hovering in the mid-30s, recovering from near-oversold territory, suggesting selling pressure is easing but momentum remains weak.
More notably, TOTAL remains below both its 50-day SMA (around $2.82 trillion) and 200-day SMA (near .37 trillion). This indicates the broader structure is still corrective. Unless price reclaims the 50-day average, rallies may face resistance near the $2.6–$2.8 trillion zone.
#cryptomarket | #Crypto 
