Crypto Rally Pauses as Bitcoin Slips Below $118K, But Coinbase Sees Solid Foundation

The recent crypto surge took a breather on Friday, with traders locking in gains following a week of legislative optimism and bullish headlines. While market momentum cooled, analysts at Coinbase say the rally still has structural strength behind it.

Bitcoin (BTC) retreated to around $117,500 during U.S. trading hours after briefly crossing $120,000 earlier in the day. The largest cryptocurrency is now roughly flat on the week, despite Monday’s spike to just under $124,000.

Ethereum (ETH) climbed to near its 2025 high of $3,700 before slipping back to $3,550, still holding a 4.5% daily gain and up more than 20% over the past seven days.

Meanwhile, XRP continued its explosive breakout, setting a new all-time high of $3.60 early Friday before pulling back below $3.40, maintaining a 4% gain on the day and a 35% weekly advance.

The CoinDesk 20 Index, a broad benchmark for major digital assets, also reached a record 4,133 overnight before dipping 3.7% from that high.

Rotation Into Altcoins

While Bitcoin’s gains cooled, capital continued flowing into altcoins. In addition to ETH and XRP, other large-cap tokens like Dogecoin (DOGE), Sui (SUI), Cardano (ADA), Avalanche (AVAX), and Uniswap (UNI) all saw double-digit weekly gains, signaling increased risk appetite and sector rotation.

Macro Context & Legislative Momentum

On the macroeconomic front, the latest University of Michigan survey showed consumer sentiment remains muted — down 16% from December 2024 — with inflation expectations still elevated despite easing slightly. One-year inflation forecasts fell to 4.4% (from 5%), and long-term expectations dropped to 3.6% (from 4%).

Adding to the crypto narrative, President Trump is expected to sign the GENIUS Act, a landmark piece of legislation focused on stablecoin regulation — the first major federal law aimed directly at the crypto sector.

Coinbase: Rally Has Room to Run

Despite the pullback, analysts at Coinbase, led by David Duong, believe the rally is far from over.

“The current market strength is driven by steady accumulation and solid fundamentals — not speculative mania,” they wrote in a Friday note.

They emphasized that derivatives markets aren’t showing signs of excessive leverage, and global liquidity conditions continue to support risk assets and ETFs. Treasury-focused crypto firms also appear to be maintaining demand.

“Short-term corrections are natural, but on-chain and macro indicators suggest this rally has a strong foundation,” the report concluded.