The cryptocurrency market showed signs of recovery on Tuesday, led by bitcoin (BTC) which surged nearly 3% to reach around $58,000. This rebound followed a recent breakdown in prices, easing fears among investors.
The positive momentum extended across the market, with the CoinDesk 20 Index rising by 2.4% in the past 24 hours. Notable gainers included solana (SOL), filecoin (FIL), Avalanche (AVAX), and Internet Computer Protocol (ICP).
Despite the current upward trend, market analysts remain cautious about the sustainability of the rally. Markus Thielen, founder of 10x Research, anticipates a short-term bullish countertrend rally for BTC, with a potential target of $60,000 before another decline to the low $50,000 range.
Seasonal trends also pose challenges for bitcoin, with historical data showing that the third quarter typically offers the weakest returns. Vetle Lunde, senior analyst at K33 Research, highlighted additional factors such as the ongoing distribution of Mt. Gox refunds and the selling of seized assets by the German state of Saxony, which could further weigh on prices.
According to K33 Research’s estimates, the market is expected to face significant selling pressure in the coming months, with up to 118,000 BTC worth billions of dollars set to enter the market due to these factors.
Overall, the market conditions are expected to remain choppy and volatile until at least October, as these external factors continue to influence cryptocurrency prices.