Stocks rose in Asia and Europe after the S&P 500 rallied on Friday. “Markets are long overdue for a relief rally,” said Hayden Hughes, chief executive of social media trading platform Alpha Impact. “Bitcoin just went through eight consecutive weeks in red territory and got technically oversold to levels we traditionally only see at the bottom of bear markets.”
Cryptocurrencies re-established their tendency to trade in tandem with equities after falling on Friday even as the S&P 500 capped a weekly advance of 6.6%. Friday’s divergence sparked concerns that investors would continue dumping digital tokens even amid a revival in demand for other risk assets.
Inflation reports from Spain on Germany on Monday under scored that the macroeconomic forces that have weighed on crypto in the past months aren’t about to ease. Consumer prices in both countries jumped faster than expected in May, adding pressure on the European Central Bank to remove crisis-era stimulus. Rising interest rates around the world have triggered a selloff in risk assets this year, sending Bitcoin down 34% since December 31.
Ether jumped as much as 6.6% on Monday while Avalanche and Solana rose 9% and 6%, respectively, before giving up some of those gains. Luna, the new token distributed to investors who saw the value of their cryptocurrencies tied to the Terra blockchain wiped out earlier this month, advanced 13%, according to CoinGecko.