AI Tokens and Institutional Buying Drive Crypto Market Recovery

The crypto market posted a strong comeback on Monday, rising 4.96% in the last 24 hours after a sharp weekend selloff that erased nearly $800 billion in markets value. The rebound reflected technical corrections, renewed confidence among institutional players, and a surge in AI-focused tokens.

Crypto Market Rebounds After Major Weekend Crash

According to market analysts, the bounce was caused by a huge short squeeze, which occurred after a wave of massive liquidation that saw many assets enter the oversold territory. When the market became stable, AI-powered altcoins were the stars of the show. ChainOpera AI increased by 70% and Bittensor by more 35% as the most recent rotation in the digital asset industry.

There was also institutional activity that contributed to the re-establishment of market confidence. Marathon Digital amassed 400 BTC, which is estimated at the worth of $46 million, indicating that key actors still regard the long-term opportunity in the markets despite the recent fluctuation.

Bitcoin regained momentum, trading above $115,000 after the weekend slump. Ethereum also showed a mild recovery, hovering near $4,100. Binance Coin (BNB) emerged as one of the day’s top gainers, surging over 15% to surpass the $1,300 level.

U.S. Shutdown Stalls ETF Approvals

The crypto markets remains on edge as the United States government enters its third week of shutdown. As the federal agencies are working with a small number of workers, all pending crypto exchange-traded fund (ETF) reviews at the SEC have been suspended.

This has stalled 16 ETF applications, with 21 more filings lodged early in October still awaiting consideration. The long-term shutdown started on October 1 when lawmakers did not agree on a funding agreement and halted most of the non-essential government functions.

The SEC has also done nothing, and this has broken a significant milestone month in the crypto industry. In October, many analysts had expected a digital asset turning point, and ETF approvals had the potential to bring in new institutional investments.

But, with no decision being made in time, investor optimism is waning. To get out of the shutdown, a funding bill is to be approved by the Congress and signed by President Donald Trump to get the normal functioning.

U.S.–China Relations Show Signs of Improvement

In a separate development impacting global markets, U.S. and Chinese officials indicated their attempts to soften recent trade tensions. This increased friction early this month, with China placing export controls on rare earth minerals and Trump placing a 100% tariff on Chinese imports.

On the weekend, the Ministry of Commerce in China signaled its readiness to negotiate, and Trump made a clue to softening his stance with a post on Truth Social.

Market analysts feel that such a diplomatic move would help to increase investor confidence and possibly give the crypto market a push. Bitcoin, which has recently again retested its golden cross structure, a technical indicator commonly followed by strong rallies, could be able to enjoy a better risk sentiment in world financial markets.