Bitcoin (BTC) rebounded to $69,000 after weeks of selling pressure. This was reflected in altcoins as well, with Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) experiencing double-digit gains.
However, analysts warn that caution is advised regarding the rise. According to them, the rally appears to be a technical bounce triggered by bearish positioning and low liquidity, rather than strong fundamental catalysts.
Speaking to Coindesk, LMAX Group analyst Joel Kruger said caution should be exercised regarding the sustainability of this recovery.
Kruger described the movement as a technical recovery in a low-liquidity environment.
At this point, Kruger noted that it was not yet accurate to characterize this recovery as the beginning of a sustained uptrend, and that it was too early to do so.
Joshua Lim, FalconX’s co-head of global markets, said that some funds have turned to volatile altcoins and options following the rally.
At this point, Jim noted that there was strong demand for bullish bets on Ethereum in the options market. Specifically, investors are aiming to profit from the short-term rise by purchasing call options in the $2,000-$2,200 range within the next two to three weeks.
Lastly, Wintermute OTC trader Jasper De Maere pointed to $75,000, noting that fundamental indicators do not suggest this rise will continue for long.
The analyst said that “the maximum pain point, $75,000, could act as a magnetic level towards the expiry date, but long positions appear weak.”
The analyst added that while the outlook for Bitcoin remains uncertain, sustained breaks above key resistance levels around $72,000 and $78,000 would signal a stronger structural uptrend.
