Why is the crypto market up today?

Key takeaways:

The crypto market is up 2.5% on May 8, with its capitalization above $3 trillion for the first time in over eight weeks.

Fed’s steady rates and stagflation fears boost Bitcoin as a store of value.

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 tokeep interest rates steadyat 4.25%-4.50% on May 7 has bolstered crypto’s appeal. Fed Chair Jerome Powell’s post-meeting remarks highlighted risingstagflationrisks — slow economic growth and persistent inflation — partly due to Trump’stariff policies.

“It appears the Fed sees both higher inflation and higher unemployment ahead,” The Kobeissi Lettersaidon X, adding:

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 toBitcoin 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,saidin a May 7 post on X after the Fed’s decision and press conference.

Anticipation of US-UK trade deal fuels market optimism

The US President Donald Trump administration has signaled a pro-crypto stance, and reports suggest atrade agreement with the UKcould 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 Timesreportedthat the country would be the UK, citing three people familiar with the matter.

🇺🇸 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

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 also 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 rallied30% 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 atariff-fueled sell-offsent 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 dailyRSIhas 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.