Compass Investments

-What to know: Bitcoin soared to $69,000 thanks to a sharp “short-squeeze” that shook altcoins like ETH, SOL, DOGE and ADA, as well as cryptocurrencies like Circle, Coinbase, Strategy and BitMine, after a prolonged period of selling pressure.

The rebound looks technical, driven more by sellers’ sentiment and low liquidity than by a clear fundamental push, and Joel Krueger of LMAX Group advises not to be under any illusions about its sustainability.

Some portfolios are now “chasing this growth” by switching to more volatile altcoins and options, said Joshua Lim of FalconX.

To confirm a stronger structural bullish trend, bitcoin needs to firmly establish itself above important resistance near $72,000 and $78,000.

Bitcoin regained $69,000 on Wednesday, up more than 10 percent from Tuesday’s low, as digital currency markets showed a broad-based rebound after a prolonged period of gloom.

Ethereum Ether (ETH), Ethereum Ether (ETH), Ethereum Ether and others all posted double-digit gains, continuing a move that took many traders by surprise.

the securities of companies related to digital assets, which were getting cheaper amid the fall of cryptocurrencies, also took advantage of the momentum. Stablecoin issuer Circle (CRCL) added 34% after its earnings report, while cryptocurrency exchange Coinbase (COIN) soared 14% . Strategy (MSTR), the largest corporate bitcoin holder, was up 9% , while Ethereum-based treasury firm BitMine was up 12% .

The massive rise was a welcome relief after weeks of relentless selling pressure and fears of further declines.

However, analysts warn: despite the rapid rebound of tokens and stocks, crypto markets are not yet out of the danger zone, as key resistance levels and macroeconomic risks remain. According to Joel Krueger, market strategist at LMAX Group, although there was no direct reason for Wednesday’s move, extreme fear and excessive short positions in crypto markets created the perfect conditions for a sharp counter-trend move.

Crypto assets have been under severe pressure in recent months and are ripe for a technical recovery, he wrote. “The market has accumulated significant tactical short exposure, leaving it vulnerable to a sharp squeeze on limited news events.

evertheless, Krueger cautioned against rushing into a sustained uptrend. “Given the sharpness of the rally and the lack of a clear trigger – especially in the face of deteriorating liquidity – this upward trend should be viewed with caution, he concluded.