Crypto Market Rockets Back: Major Recovery After $800B Weekend Wipeout

AI Tokens and Institutional Buying Drive Crypto Market Recovery Amid U.S. Shutdown

The cryptocurrency market staged a remarkable rebound on Monday, climbing nearly 5% in the last 24 hours following a dramatic weekend selloff that erased almost $800 billion in market value. Analysts say the recovery was fueled by technical corrections, renewed confidence among institutional investors, and a surge in artificial intelligence-focused tokens.

Weekend Selloff and Market Volatility

The crypto markets experienced one of the sharpest corrections in months over the weekend. Bitcoin briefly dipped below $112,000, wiping billions off total market capitalization, while Ethereum fell to nearly $4,000. Analysts attribute the selloff to a combination of geopolitical tensions, market over-leveraging, and panic-driven liquidations.

During the downturn, many altcoins entered oversold territory, triggering a massive short squeeze as traders scrambled to cover positions. This technical response helped set the stage for the Monday rebound, demonstrating the market's resilience despite heightened volatility.

AI-Driven Altcoins Lead the Recovery

Among the standout performers were tokens tied to artificial intelligence projects, highlighting the growing intersection of AI and blockchain innovation. ChainOpera AI surged 70% in just 24 hours, while Bittensor rose more than 35%. Market observers note that these tokens are attracting renewed interest from both retail and institutional investors due to their integration of machine learning and decentralized applications.

“This is not just a standard bounce,” said Martin Keller, a blockchain strategist at CryptoInsights. “The AI-related altcoins are showing that innovation in crypto can act as a catalyst for broader market recovery, even after significant turbulence.”

Institutional Buying Reignites Confidence

Institutional activity further reinforced market optimism. Marathon Digital, a prominent mining company, reportedly acquired an additional 400 BTC valued at approximately $46 million, signaling that large players continue to see long-term potential despite recent volatility.

Bitcoin rebounded to above $115,000, while Ethereum stabilized near $4,100. Binance Coin (BNB) emerged as one of the top gainers, surging over 15% to surpass $1,300. Analysts suggest that institutional buying, combined with AI token enthusiasm, may support sustained momentum in the coming weeks.

U.S. Government Shutdown Stalls ETF Approvals

While market sentiment improved, the cryptocurrency sector remains on edge due to the ongoing U.S. government shutdown, now entering its third week. The shutdown has left federal agencies operating with minimal staff, effectively halting all pending approvals for crypto exchange-traded funds (ETFs) at the Securities and Exchange Commission (SEC).

Currently, 16 ETF applications are on hold, with 21 more filings submitted in early October awaiting review. Analysts note that approval of these ETFs could have provided a significant influx of institutional capital into the market, potentially stabilizing prices and encouraging adoption.

“The shutdown is creating uncertainty that could suppress investor confidence,” said Laura Chen, senior analyst at Global Crypto Research. “Even as technical indicators improve, fundamental catalysts like ETF approvals remain stalled.”

Resolution of the shutdown requires Congress to pass a funding bill, which must then be signed by President Donald Trump, enabling normal federal operations to resume. Until then, the crypto sector may continue to face regulatory ambiguity, impacting both institutional and retail investor decisions.

U.S.–China Relations Influence Market Sentiment

Global economic factors also played a key role in recent market movements. Tensions between the U.S. and China had escalated earlier this month, with China imposing export controls on rare earth minerals and President Trump announcing a 100% tariff on Chinese imports. These developments initially shook global financial markets, including digital assets.

Over the weekend, however, there were signs of diplomatic easing. China’s Ministry of Commerce signaled a willingness to negotiate, while Trump posted indications of softening his stance on trade policy. Analysts view these moves as positive for risk sentiment across financial markets, including cryptocurrencies.

“Geopolitical risks can create sharp, short-term shocks,” said Diego Ramirez, a macroeconomics specialist. “When tensions ease, markets often recover quickly. Cryptocurrencies, which are highly sensitive to risk sentiment, are no exception.”

Technical Indicators Point to Sustained Upside

From a technical perspective, Bitcoin has retested its golden cross structure—a bullish signal often associated with strong upward trends. Ethereum and other major altcoins are also showing early signs of stabilization, suggesting the potential for further upside if investor confidence continues to rebuild.

Some analysts highlight that liquidity rotation into AI-focused tokens could mark the beginning of a broader thematic trend within the crypto ecosystem. Investors are increasingly viewing blockchain projects that integrate emerging technologies as higher-potential growth plays, especially in the wake of major market corrections.

Lessons from the Market Recovery

The weekend’s volatility underscores the importance of risk management for crypto traders. The sharp price swings were driven by a combination of leverage, geopolitical headlines, and sudden liquidity constraints. Market participants are reminded to treat early reports or social media announcements as risk indicators rather than confirmed developments.

Analysts also recommend monitoring ETF flows, open interest, and funding rates to gauge potential market movements, particularly during low-volume periods such as weekends. These metrics can provide insight into the balance of buying and selling pressure and help traders navigate volatile conditions.

Outlook for the Week

Looking ahead, the crypto market is likely to remain sensitive to both geopolitical developments and U.S. domestic policy. If the government shutdown continues and ETF approvals remain stalled, volatility may persist despite technical rebounds. Conversely, easing trade tensions and institutional buying could support a more sustained recovery.

Investors are advised to keep an eye on key support levels for major assets. Bitcoin above $115,000 and Ethereum near $4,100 may act as stabilizing points, while renewed momentum in AI and innovative blockchain projects could provide additional upside potential.

In conclusion, Monday’s recovery highlights the market’s resilience in the face of substantial risk. Technical corrections, institutional buying, and emerging tech-focused tokens like ChainOpera AI and Bittensor have driven a strong comeback, yet macroeconomic and political factors remain critical for near-term stability. As the crypto market navigates geopolitical tensions, regulatory uncertainty, and technological evolution, participants will need to balance opportunity with caution.

Writer @Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

 Check out other news and articles on Google News

Disclaimer:

The articles published on hokanews are intended to provide up-to-date information on various topics, including cryptocurrency and technology news. The content on our site is not intended as an invitation to buy, sell, or invest in any assets. We encourage readers to conduct their own research and evaluation before making any investment or financial decisions.

hokanews is not responsible for any losses or damages that may arise from the use of information provided on this site. Investment decisions should be based on thorough research and advice from qualified financial advisors. Information on HokaNews may change without notice, and we do not guarantee the accuracy or completeness of the content published.