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Bitcoin (BTC) Price Bounces Toward $60K, But Volatility Likely to Persist: Crypto Analysts
Cryptocurrencies rallied on Tuesday with bitcoin (BTC) rising nearly 3% to around $58,000, as fears eased after last week’s plunge.
The recovery was broad-based, with the market benchmark CoinDesk Index 20 up 2.4% in the last 24 hours, led by Solana’s gains (SOL)file coin (FILE) and native Avalanche tokens (AVAX-A) and Internet computer protocol (SME).
The rally could last a long time, with BTC potentially reaching $60,000, but the recovery will be short-lived, said Markus Thielen, founder of 10x Research.
“The $55,000 to $56,000 range is forming a base from a technical analysis perspective. However, given the medium-term technical damage, we do not expect anything other than a short-term counter-trend tactical bullish rally,” Thielen said in a market update on Tuesday.
“We expect Bitcoin to rally to near $60,000 before another decline to the $50,000 mark, creating a challenging trading environment,” he added.
Seasonal trends aren’t helping bitcoin either: The third quarter has historically seen the weakest returns, Vetle Lunde, senior analyst at K33 Research, noted Tuesday.
The weak seasonality coincides with the sale of seized assets by the German state of Saxony and the ongoing distribution of Mt. Gox refunds. weighing on pricesHe added.
According to estimates by K33 Research, the market will need to absorb 75,000 to 118,000 BTC of sales from Saxony and Mt. Gox customers over the summer, worth between $4.3 billion and $6.8 billion at current prices.
“We expect these flows to weigh on performance in the months ahead and that volatile market conditions will persist into October,” Lunde said.