Bitcoin regained some ground, hitting $65,400 early Wednesday, marking a clean rebound in the crypto market for the first time in weeks. This shift was influenced by a weaker US dollar and a more risk-on sentiment across Asian stocks.
Earlier this week, the overall cryptocurrency market cap dipped to $2.19 trillion, almost revisiting the lows seen during the crash on February 5. This situation adds an interesting twist to the market’s current dynamics.
If these support levels hold, analysts like Alex Kupczykevich from FXPro suggest we could see a textbook “double dip” with the potential for around a 10% increase. However, he cautioned that failing to recover could indicate the end of this upward trend, possibly resulting in a further 25% drop.
A double bottom is a well-known bullish pattern in chart analysis, signaling a possible trend reversal after a decline. It usually involves the price falling to a low, bouncing back slightly to form resistance, and then dropping again to test that low, creating a W-shaped pattern. A bullish reversal is confirmed once the price surpasses this peak.
The spotlight is now on whether the current rally can surpass the temporary pullback to the $2.47 trillion market cap seen about ten days ago.
Altcoins rise as the dollar falls
In the meantime, major cryptocurrencies are mirroring Bitcoin’s climb. Over the last day, Ether rose by 4.2%, Solana grew by 7%, and XRP increased by 3%. This coincided with a 1.4% rise in MSCI’s index of Asian stocks, which hit a record high before Nvidia’s upcoming earnings report, driven by gains in South Korea and Taiwan, where AI-related chipmakers achieved record levels.
The dollar’s decline has helped risk assets. Following President Trump’s State of the Union address, the Bloomberg Dollar Spot Index saw a slight drop even as he expanded his tariff plans, despite the Supreme Court nullifying global import taxes.
Trump also hinted that tariffs might eventually replace the existing income tax system altogether.
A weaker dollar is generally favorable for Bitcoin, but this relationship has been a bit unpredictable during the recent downtrend.
Despite the fluctuations, confidence appears shaky. Analysts have noted a “crisis of confidence” in Bitcoin after its nearly 50% decline from its peak, and there seem to be no clear catalysts for growth at the moment.
Furthermore, Kupczykevich from FxPro expressed skepticism, suggesting that the market may not have reached its bottom yet and that “true capitulation is still a long way off.”
