Solana’s SOL, Avalanche’s AVAX and Render’s RNDR led the cryptocurrency rally as nearly all but one member of the CoinDesk 20 Index posted gains.
Cryptocurrencies rebounded sharply on Friday from the previous day’s lows and Bitcoin (BTC) reclaimed $63,000 as investors quickly shrugged off concerns over slightly higher inflation readings and turned their attention to an update on China’s fiscal policy on Saturday.
Solana (SOL), Avalanche (AVAX) and Render (RNDR) tokens led the way among major altcoins with gains of 6%-8%. The only token on the CD20 index with a negative daily performance was Uniswap (UNI), which slightly shed some of its Thursday gains that were driven by the decentralized exchange’s plan to launch its own layer-2 network.
The cryptocurrency rally came as stocks also gained ground, with the Dow Jones Industrial Average and S&P 500 closing the week at record highs. The U.S. dollar index paused below 103 after strengthening sharply over the past week, as traders readjusted expectations for further Federal Reserve interest rate cuts following strong U.S. jobs reports and higher inflation readings.
Cryptocurrency-related stocks also reflected the positive sentiment. Bitcoin mining companies including MARA Holdings (MARA), Riot Platforms (RIOT) and Bitdeer (BTDR) soared between 5% and 10%, while American cryptocurrency exchange giant Coinbase (COIN) ended the day up 7%.
MicroStrategy (MSTR), the largest corporate holder of BTC with nearly $16 billion of the asset, rose 16% to hit its highest price since March 2000. The company’s stock price premium over its bitcoin holdings also widened to the widest level since 2021.
The key catalyst for crypto volatility could be China’s upcoming fiscal policy update by the finance minister scheduled for early Saturday UTC. Investors are anticipating more financial stimulus for the ailing Chinese economy and financial markets, which could impact the digital asset market, the Coinbase report noted.
"As most markets will be closed during this upcoming briefing, we expect traders may turn to cryptocurrency markets as a way to express their (rough) opinions on the size and strength of China's fiscal announcements," the authors said.
Markus Thielen, founder of 10x Research, noted that recent US economic data shows a resilient economy and labor market, easing past concerns about an impending recession.
“This sets the stage for risk assets to perform well through the end of the year, and it may take little to push crypto prices higher,” Thielen said. “A significant move is likely on the horizon, and diligent traders will be well positioned to take advantage of it.”
