On April 21, 2025, the cryptocurrency market staged a significant recovery, snapping a period of volatility driven by macroeconomic uncertainties and global trade tensions. Bitcoin spearheaded the rally, jumping more than 3% to reach $87,337.31, while altcoins joined the upward trend, signaling a broader market resurgence.
Crypto Market Snapshot
Bitcoin, the world’s largest cryptocurrency, climbed over 3% to more than $87,000, a notable breakout from its recent trading range of $83,000-$86,000.
Giant cap tokens like $ETH followed suit, recovering to $1,644, while $XRP reached $2.12, reflecting a broader market upswing. Other altcoins like $SOL at $140 also experienced gains, contributing to a total market capitalization increase to approximately $2.74 trillion, up from $2.5 trillion earlier in the week. Concurrently, gold prices also soared significantly to an all-time high of $3,400, fueled by strong investor demand amid global economic uncertainties and inflationary pressures.
Source: COIN360
Factors Driving the Recovery
The Macro Catalysts Behind the Crypto Recovery
A critical catalyst for the crypto market’s recovery was the U.S. dollar’s sharp decline, hitting a three-year low against major currencies, noted by CoinDesk. The U.S. dollar index declined to below 98, driven by hedge funds selling the currency against other major currencies such as the EUR, JPY, and AUD in the forex market. As the dollar weakened, investors sought alternatives due to the concern of inflation, boosting Bitcoin and gold as hedges against fiat currency instability.
Source: TradingView
This drop was triggered by reports of President Donald Trump exploring ways to challenge Federal Reserve Chairman Jerome Powell’s position, raising fears of compromised Fed independence.
Additionally, global liquidity saw a notable uptick, driven by an expanding M2 money supply.
As per MacroMicro data, the aggregate M2 across the U.S., Europe, Japan, and China rose steadily from December to February, reaching $90.2 trillion.
These macroeconomic shifts drove Bitcoin’s rally to $87,000, with altcoins benefiting from the broader market optimism, aligning with gold’s 2% gain on the same day.
Big Buyers Emerge: Institutional Bitcoin Bets Increase
Institutional investors played a pivotal role in the crypto market’s recovery, signaling strong belief in Bitcoin’s long-term value despite recent volatility. Strategy, formerly known as MicroStrategy, made headlines earlier in April 2025 by acquiring an additional 3,459 $BTC during a period of market uncertainty. This move reflects Strategy’s ongoing commitment to Bitcoin as a treasury reserve asset, even as the company reported $5.91 billion in unrealized losses from its Bitcoin holdings in Q1 2025 due to the asset’s earlier underperformance.
Additionally, according to The Block, Japan-based Metaplanet bolstered market confidence by purchasing another 330 $BTC today, increasing its total holdings to 4,855 $BTC. These corporate actions underscore Bitcoin’s growing acceptance as a hedge against macroeconomic uncertainty, contributing to the market’s upward momentum.
A True Uptrend or Temporary Surge?
Despite the rally, this upward movement remains driven by anxiety rather than a confirmed return to an uptrend. Bitcoin has led the gains with the Bitcoin Dominance (BTC.D) index surging and remaining high at 64%. However, the broader market’s direction remains uncertain due to weak altcoin performance and low trading volumes.
A clearer trend may emerge in May 2025, when the Federal Reserve meets and China potentially begins easing policies with the U.S., especially as President Trump has shown signs of softening his rhetoric on trade. Until then, the market’s gains, primarily led by Bitcoin, reflect cautious optimism amid macroeconomic fears rather than a sustained bullish cycle.
