Cryptocurrencies saw a rebound on Tuesday as bitcoin (BTC) rose by nearly 3% to reach around $58,000. This increase came after concerns following last week’s drop were alleviated. The overall market also showed positive movement, with the CoinDesk 20 Index rising by 2.4% in the past 24 hours. Leading the gains were solana (SOL), filecoin (FIL), as well as the native tokens of Avalanche (AVAX) and Internet Computer Protocol (ICP).
Despite the current upward trend, analysts like Markus Thielen, the founder of 10x Research, believe that the rally may be short-lived. According to Thielen, while BTC could potentially reach $60,000, it is likely to experience another decline back to the low $50,000 range after that. This could create a complex trading environment for investors.
Additionally, seasonal trends are not in favor of bitcoin at the moment. Vetle Lunde, a senior analyst at K33 Research, pointed out that historically, the third quarter has offered the weakest returns for the cryptocurrency. Factors such as the selling of seized assets by the German state of Saxony and the ongoing distribution of Mt. Gox refunds are also putting pressure on prices.
K33 Research estimates that the market will need to absorb between 75,000 to 118,000 BTC from these selling activities throughout the summer, amounting to approximately $4.3 billion to $6.8 billion at current prices. Lunde expects these flows to impact performance in the coming months, leading to choppy market conditions that may persist until October.
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