A broad recovery across digital assets unfolded alongside a softer U.S. dollar and strength in Asian equities, though analysts remain divided over whether the Feb. 5 lows will ultimately hold.
Bitcoin (BTC) climbed back above $65,400 early Wednesday, benefiting from renewed risk appetite and dollar weakness that delivered crypto’s first decisive bounce in weeks.
Earlier in the week, total crypto market capitalization had fallen to roughly $2.19 trillion, nearly revisiting the trough set during the Feb. 5 sell-off. That retest makes the current rebound technically significant.
If support holds, the setup resembles a classic double-bottom formation, implying roughly 10% upside, according to Alex Kuptsikevich, chief market analyst at FxPro. However, he cautioned that failure to sustain the rebound could mark the end of the recovery attempt and expose the market to a further 25% downside move.
A double bottom is a well-known bullish reversal pattern that forms after a prolonged decline. It features two similar lows separated by a temporary rally, creating a “W” shape on the chart. A breakout above the interim peak typically confirms the reversal signal.
The key question now is whether the current advance can surpass the brief rebound to a $2.47 trillion market cap seen about 10 days ago.
Altcoins advance as dollar eases
Major tokens moved higher alongside bitcoin. Ether gained 4.2% over the past 24 hours, solana rose 7%, and XRP added 3%.
The move coincided with a 1.4% gain in MSCI’s Asia equity gauge, which climbed to a record high, led by markets in South Korea and Taiwan. AI-related chipmakers in the region reached fresh all-time highs ahead of earnings from Nvidia later Wednesday.
Currency markets also supported risk assets. The Bloomberg Dollar Spot Index edged lower following President Donald Trump’s State of the Union address, where he reiterated plans for tariffs despite a Supreme Court ruling striking down his global import tax framework. He additionally suggested tariffs could eventually replace the federal income tax system.
Historically, a weaker dollar has provided a favorable backdrop for bitcoin, although that relationship has been less consistent during the current drawdown.
Still, sentiment remains fragile. Bloomberg reported that analysts it surveyed described a “crisis of confidence” surrounding bitcoin after its nearly 50% decline from record highs, noting a lack of clear new growth catalysts.
Kuptsikevich echoed that caution, arguing the market likely has not yet reached a definitive bottom and warning that “real capitulation is still ahead.”
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