Bitcoin (BTC) rebounded to $69,000 after weeks of selling pressure. This was also reflected in altcoins, with Ethereum (ETH), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA) seeing double-digit gains.
However, analysts warn that caution is required in the face of this increase. They say the rally appears to be a technical rebound triggered by bearish positioning and low liquidity, rather than strong fundamental catalysts.
Speaking to Coindesk, LMAX Group analyst Joel Kruger said there is a need to be cautious about the sustainability of this recovery.
Kruger described this move as a technical recovery in a low liquidity environment.
At this point, Kruger stressed that it was not yet accurate to call this rally the start of a sustained uptrend and that it was too early to do so.
Joshua Lim, co-head of global markets at FalconX, said some funds shifted to volatile altcoins and options after the rally.
At this point, Jim noted that there was strong demand for bullish bets on Ethereum in the options market. Specifically, investors aim to take advantage of the near-term upside by purchasing call options in the $2,000 to $2,200 range over the next two to three weeks.
Finally, Wintermute OTC trader Jasper De Maere cited $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 expiration date, but long positions look weak.”
The analyst added that while Bitcoin’s outlook remains uncertain, sustained breakouts above key resistance levels around $72,000 and $78,000 would signal a stronger structural uptrend.
*This does not constitute investment advice.