Crypto stocks rebound, volatility eases but analysts say we are not out of the woods 

After just 21 stocks in the S&P 500 closed higher yesterday, US equities were largely on the rebound Tuesday.

The S&P 500 was up 2.4% as of 2:30 pm ET while the tech-heavy Nasdaq Composite rallied 2.5%.

Crypto-related equities were riding the recovery wave Tuesday, too.

Coinbase, which lost as much as 20% Monday, was trading 4% higher at 2:30 pm ET. MicroStrategy, after sliding as much as 25% Monday, was also back in the green, up 6% at that time.

The winner of crypto equities Tuesday was Core Scientific, which was on track to close more than 17% higher toward the end of the trading session. While the general stock market rebound and macroeconomic conditions could have contributed, this move was likely fueled by an announcement that the bitcoin miner would supply additional power to host CoreWeave’s NVIDIA GPUs.

Read more: Bitcoin’s levels to watch after selloff: Technical analyst

Fellow bitcoin miner Marathon Digital gained more than 3% as of 2:30 pm ET, paring Monday’s losses that saw shares lose as much as 18%.

Tuesday’s turnaround comes as the Japanese yen and VIX pulled back early in the session, helping to ease recessionary concerns and calm markets after Monday’s global selloff.

The VIX spiked to 55 yesterday, the highest level since March 2020. The volatility index pulled back around 30% to 27 Tuesday morning, but is still up 66% over the past five trading days.

Even with Tuesday’s VIX decline, DataTrek Research co-founder Nicholas Colas still cautions that the worst may not be behind us just yet.

Read more: In a sea of red, Jump Crypto briefly held $500M USDC

“Every single time the VIX is at these levels, there is significant uncertainty that does not dissipate in a day or two,” Colas said. “Stock market volatility clusters. Markets don’t just return to normal even if the notional catalysts for the move seem inadequate to explain a sudden decline in stock prices.”

The yen eased Tuesday against the US dollar for the first time since the start of August. The greenback has now fallen around 6% against the yen over the past five trading days.

Markets are still expecting the Federal Reserve to slash interest rates in September, although traders are less certain than they were Monday. Fed fund futures showed a 67% chance of a 25 basis point cut next month Tuesday, down from 85% Monday but up from 11% a week ago, per data from CME Group.

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