Bitcoin recovers and surpasses $78,500; analysts state that there is still no basis for a long-term rise.
Bitcoin rose 4.2% in the last 24 hours, reaching $78,662 by the end of Monday, recovering from around $75,000 recorded at the beginning of the day.
Analysts warned that the movement likely reflects a technical recovery, not the beginning of a sustained recovery.
BITCOIN
BTC and other major cryptocurrencies recorded a recovery by the end of Monday, regaining some of the losses from the sharp market decline.
Bitcoin rose 4.2% in the last 24 hours, reaching $78,662 at 11 PM (Eastern Time) on Monday, after falling to around $75,000 earlier in the day, according to The Block's pricing page. Ethereum rose 5.86%, to $2,322, while other major altcoins also recorded modest gains, although prices remain well below levels observed before the recent decline.
Analysts warned that the movement seems more consistent with a technical recovery than the start of a sustained recovery, as macroeconomic uncertainty and tightening financial conditions continue to affect market sentiment.
"The recovery reflects the coverage of short positions after liquidation, oversold conditions, and stabilization after forced sales. BTC and ETH tend to be the first to receive buy orders as liquidity concentrates in the main cryptocurrencies," said Vincent Liu, CIO of Kronos Research. "The momentum may extend in the short term, but without flows led by the spot market and an improvement in macroeconomic liquidity, this movement likely represents just a relief recovery."
The decline in recent days followed a reassessment of expectations regarding U.S. interest rates, with markets reacting to signs of a more aggressive stance on monetary policy from the Federal Reserve and uncertainty surrounding the appointment of the Fed chair, according to analysts.
Durability continues to be questionable.
Rick Maeda, associate researcher at Presto Research, stated that the recovery reflects a broader reduction in risk aversion, rather than a specific catalyst for cryptocurrencies.
"After the initial drop linked to the Fed's aggressive monetary policy, risk sentiment in general improved, with U.S. stocks recovering and a stronger ISM index driving markets back to risk-taking," Maeda told The Block. "With much of the monetary policy shock already absorbed, selling pressure has decreased and cryptocurrencies have automatically risen, following other risk assets."
Still, Maeda noted that the durability of the current recovery is questionable.
"If the aggressive narrative from the Fed, driven by Warsh, continues to support a strong dollar and high yields, the movement will likely be a recovery for stabilization, not a resumption of the trend," he said, adding that the absence of new negative catalysts has helped prices remain firm for now.
Andri Fauzan Adziima, research leader at Bitrue, also took a cautious tone, calling the rise fragile. "This recovery, primarily driven by technical factors, with purchases on dips to oversold levels around $74,500 for BTC, remains fragile and unlikely to sustain without new catalysts, such as new inflows into ETFs or macroeconomic easing," said Adziima.
Market participants are closely watching U.S. employment data. Thursday's jobless claims and Friday's non-farm payroll report are seen as short-term catalysts. "Weaker data could ease yields and the dollar, supporting risk assets," said Liu from Kronos.