Key takeaways:
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The crypto market is up 2.5% on May 8, with its capitalization above $3 trillion for the first time in over eight weeks.
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Fed’s steady rates and stagflation fears boost Bitcoin as a store of value.
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Anticipated US-UK trade deal and a technical rebound fuel market optimism.
The cryptocurrency market is up today, with the total market capitalization rising by approximately 2.5% in the last 24 hours to reach $3.06 trillion on May 8.
Today’s gains were led by Bitcoin (BTC) and Ether (ETH), which have risen around 2.3% and 4%, respectively.
Stagflation fears “good” for crypto assets
The Federal Reserve’s decision to keep interest rates steady at 4.25%-4.50% on May 7 has bolstered crypto’s appeal. Fed Chair Jerome Powell’s post-meeting remarks highlighted rising stagflation risks — slow economic growth and persistent inflation — partly due to Trump’s tariff policies.
“It appears the Fed sees both higher inflation and higher unemployment ahead,” The Kobeissi Letter said on X, adding:
“They are holding off on cutting rates to see which part of their dual mandate spikes further. Uncertainty remains.”
This environment elevates Bitcoin’s status as a store of value, often likened to “digital gold.” Investors, wary of inflationary pressures eroding fiat currencies, are turning to Bitcoin as a hedge, much like during the 2020 monetary easing period when crypto rallied.
“The Fed is worried about stagflation,” Zach Pandl, head of research at Grayscale, said in a May 7 post on X after the Fed’s decision and press conference.
“We think that outcome would be good for Bitcoin.”
Anticipation of US-UK trade deal fuels market optimism
US President Donald Trump’s administration has signaled a pro-crypto stance, and reports suggest a trade agreement with the UK could be announced soon.
In a May 7 Truth Social post, Trump said that a “major trade deal” with a “big, and highly respected, country” would be announced on May 8. The New York Times reported that the country would be the UK, citing three people familiar with the matter.
Interesting:
🇺🇸 JUST IN: President Trump announces a “major trade deal” news conference scheduled for tomorrow at 10:00 AM in the Oval Office with “a big, and highly respected country.” pic.twitter.com/irsood0JRZ
— Cointelegraph (@Cointelegraph) May 8, 2025
A US-UK deal would signal the de-escalation of global trade tensions, boosting risk appetite across markets, including cryptocurrencies.
Related: Falling DXY part of US financial system’s ‘long-term transition’ — Will Bitcoin continue to shine?
Following this announcement, Bitcoin rose as much as 4%, extending its weeklong rally as macroeconomic conditions improve.
Other major cryptocurrencies followed in Bitcoin’s footsteps, signaling a shift in market sentiment with the Crypto Fear & Greed Index returning to “greed” territory.
Crypto market technical rebound
From a technical perspective, TOTAL’s — the combined market capitalization of all cryptocurrencies — gains today are part of a rebound that started at the $2.4 trillion support.
It has since rallied 30% to trade above $3 trillion for the first time in two months. Note that this is also where the 200-day simple moving average (SMA) currently sits.
The last time the market cap was above the $3 trillion mark was on March 3 before a tariff-fueled sell-off sent it to as low as $2.27 trillion on April 7.
The TOTAL market cap, currently at $3.03 trillion, seeks to break above the resistance zone between $3.1 trillion and $3.25 trillion.
If this happens, it would signal the ability of the bulls to sustain the uptrend, with their eyes set on the all-time highs above $3.69 trillion.
The daily RSI has increased steadily from oversold conditions at 30 on April 7 to the current value of 68, suggesting the bullish momentum is accelerating.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
