Cryptocurrency markets exhibited a limited recovery after the sharp sales wave towards the end of the week. Bitcoin and leading altcoins recovered some of their losses, especially with the buying on Monday night. However, analysts remain cautious that this rise may be a technical reaction rather than the beginning of a permanent trend.
Technical Reaction or A New Beginning?
While Bitcoin rose by 4.2 percent in the last 24 hours and rose above the level of 78 thousand dollars, it was seen that it fell to 75 thousand dollars during the day. Ethereum, on the other hand, approached the $ 2,300 band with an increase of 5.8 percent. Although there have been similarly limited increases in other major altcoins, prices are still significantly below the levels before the last decline.
According to market experts, there is no strong fundamental story behind this recovery. Kronos Research CIO Vincent Liu states that the rise is mostly related to post-liquidation short position closings and stabilization of oversold conditions. According to Liu, Bitcoin and Ethereum are the first cryptocurrencies to recover as liquidity is primarily directed towards large assets. However, it is difficult for this movement to be permanent without a strong money inflow in spot markets and improvement in macroeconomic conditions.
The main reason for the recent sharp sales is the repricing of hawkish expectations regarding the monetary policy of the US Federal Reserve (Fed). Signals that interest rates may remain high for a long time and uncertainties regarding the Fed presidency accelerated the flight from risky assets. In this process, cryptocurrencies also came under pressure along with stocks.
Macro Developments and Other News
Rick Maeda from Presto Research states that the recovery in the crypto market is linked to a temporary improvement in general risk appetite rather than a crypto-specific development. The recovery in US stock markets and some strong economic data caused investors to take short-term risks again. However, the strong course of the dollar and the fact that bond interest rates remain high indicate that this rise is fragile.
On the other hand, markets are not only focused on price movements. Recently, data showing that fund flows towards spot Bitcoin ETFs in the USA have weakened again attracted attention. ETFs have been a key element supporting the Bitcoin price in previous months. Analysts emphasize that it is difficult for the market to enter a permanent uptrend without strong and continuous entries from this channel.
In the near term, investors will keep their eyes on employment data from the USA. Weekly unemployment benefit applications and non-farm employment report may be decisive on interest rate expectations. Weak data could provide short-term relief for cryptocurrencies by suppressing dollar and bond interest rates.
As a result, the current price movements can be read as a natural respite following panic selling in the crypto market. However, both macroeconomic uncertainties and the lack of strong demand in spot markets require investors to remain cautious. Therefore, it would not be surprising to see a market structure that is volatile and in search of direction in the coming days.
