Bitcoin rebounds near $115,000 alongside altcoins as 'cautiously optimistic' traders buy the dip

Bitcoin and major altcoins are recovering from a notable macro-led decline that took place last week, as investors cautiously re-enter the market.

According to The Block's crypto price page , bitcoin rose 1.22% in the past 24 hours to $114,738 as of 10:40 p.m. on Sunday. The world's largest cryptocurrency recently experienced a significant price drop from around $119,000 on July 31 to a low of $111,800 on Saturday. 

Major altcoins showed similar price fluctuations while posting varying gains on Sunday. Ether rose 3.12% to $3,549, XRP gained 6.32% to $3 and Solana added 1.66% to $163.69.

"The recent market dip appears to have been triggered by a broader risk-off sentiment following the disappointing July U.S. nonfarm payrolls report," said Presto Research Analyst Min Jung. The report showed that the U.S. added just 73,000 jobs in July, which is far lower than expected.

Jung also said that the weaker-than-expected data, coupled with declines across the U.S. stock market, likely contributed to profit-taking across crypto, especially after several weeks of rallying.

Following last week's macro data-induced decline, analysts said that investors and institutions swiftly moved to "buy the dip."

"Whenever there's a dip, it doesn't last very long as buyers come in very quickly to take advantage of the opportunity … It's clear that long term investors and institutions are the ones doing this," said Jeff Mei, COO at BTSE. "With the recent flurry of crypto treasury companies buying assets and TradFi institutions rolling out crypto services and partnerships, we expect bitcoin's monthly closes to get higher and higher going forward."

Traders remain 'cautiously optimistic'

While macro uncertainty and institutional-led bullish sentiment clash, traders are currently "cautiously optimistic," said Kronos Research CIO Vincent Liu. 

"The Fear and Greed Index is tilting towards greed, showing improving sentiment," Liu said. "Traders are leaning back into risk, supported by whale buying and hopes for eventual rate cuts."

Liu said investors now look to the upcoming July consumer price index (CPI) release on Aug. 12, which is a key inflation indicator that would likely affect the next interest rate decision. 

The U.S. Federal Reserve held interest rates steady at its last FOMC meeting on July 29 and 30. Fed Chair Jerome Powell has indicated that the September rate cut may not be as likely as highly anticipated, with the rate decision depending on macroeconomic data.

Nonetheless, the CME Group's FedWatch Tool indicates  a 80.8% probability of a 0.25% decrease to 4.00-4.25% at the next meeting on Sep. 17.

Beyond the immediate movements, Kronos' Liu said he expects the U.S. SEC's recently announced "Project Crypto" to impact the markets positively down the road.

"The SEC's 'Project Crypto' is set to modernize regulations by clarifying token classifications and  introducing an innovation exemption for DeFi," Liu said.  "This regulatory clarity could accelerate DeFi growth, reduce uncertainty, and boost market confidence in the coming months."