bitcoin recovered $65,400 early Wednesday, as a weaker US dollar and a risk-on tone in Asian stocks gave crypto markets their first clean bounce in weeks.
The broader cryptocurrency market capitalization had fallen to $2.19 trillion earlier this week, virtually retesting the lows hit during the Feb. 5 crash. That proximity is what makes the current movement interesting.
If the level holds, the market will face a classic “double bottom” with approximately 10% upside, according to Alex Kuptsikevich, chief market analyst at FxPro. If not, he warned, “the lack of recovery will signal the end of the recovery, opening the possibility of a new 25% drop.”
A double bottom is a classic bullish chart pattern that signals a possible trend reversal after a downtrend. Imagine the price falls to a low, then bounces a little, forming resistance, and then falls again to test that same low. This creates a W-shaped structure with two “bottoms.” Once the price breaks above the mid-peak, a bullish reversal is confirmed.
Therefore, attention is focused on whether the current recovery spike extends beyond the brief bounce to $2.47 trillion in market capitalization seen about 10 days ago.
Altcoins rise as dollar falls
Meanwhile, major tokens are following bitcoin higher. Ether rose 4.2% over the past day, solana gained 7%, and XRP added 3%. The moves came as the MSCI gauge for Asian stocks rose 1.4% to a record, led by South Korea and Taiwan, where AI-linked chipmakers hit record highs ahead of Nvidia’s earnings report later on Wednesday.
The dollar provided a tailwind for risk assets. The Bloomberg Dollar Spot Index fell after President Trump’s State of the Union address, in which he doubled down on his tariff plans despite the Supreme Court eliminating his taxes on global imports.
He further suggested that tariffs could eventually replace the income tax system entirely.
A weaker dollar has historically been positive for Bitcoin, although the relationship has been inconsistent during this down cycle.
But conviction remains weak despite the rebound. Bloomberg reported that analysts it surveyed described a “crisis of confidence” in bitcoin after its nearly 50% drop from all-time highs, with no obvious new catalysts for growth.
FxPro’s Kuptsikevich went further, saying the market likely hasn’t bottomed yet and that “true capitulation is yet to come.”
