Dogecoin, Bitcoin Lead Recovery Among Majors, But Some Analysts Warn of Selling Pressure

Bitcoin BTC$88,376.67 neared $23,500, its highest level in over a month, during the early European hours on Wednesday. The gain came as ether ETH$3,006.15, the second-largest cryptocurrency by market cap, surged to $1,500 earlier this week ahead of the Ethereum blockchain's expected “Merge” in September.

Dogecoin’s DOGE rose 11%, leading gains among major cryptocurrencies in the past 24 hours. No technical catalysts for the move seemed to exist, but developers for the network polled community members for their opinions on a Dogecoin-centric hackathon event in November, which may suggest future technical development.

Prices of Cardano’s ADA and XRP rose as much as 8%. BNB added 2.7%, while Solana’s SOL traded flat after a nearly 30% rally over the past week. Total crypto market capitalization increased 4% to above $1.1 trillion.

Outside of major cryptocurrencies, ApeCoin’s APE jumped 8% as buying momentum from last week’s metaverse game demo continued. Shiba Inu’s SHIB rose 10% despite the lack of a technical catalyst.

Market commentators said bitcoin gains came amid a recovery in broader equity markets as traders assess the upcoming round of U.S. rate hikes. Odds show a 65% chance of a 75-basis point hike.

“Bitcoin on Tuesday posted its highest gains in a month on the back of a rebound in U.S. stock indices and a weaker dollar,” Alex Kuptsikevich, a senior market analyst at FxPro, said in an email.

“Bitcoin has tested the highs since June 13 near $23,700, and on Wednesday, it is trying to consolidate above its 50-day moving average,” Kuptsikevich said. Consolidation above the 50-day moving average is seen as a sign of a positive shift in the momentum among chart-based or price action traders.

However, Kuptsikevich added: “If the upside momentum stalls, as it did in February and March this year, we should be prepared for a sharp increase in selling.”

Other analysts showed similar sentiments and cautioned against a bullish mood.

“With the rules of the future games of mining, staking and trading still pretty murky, and the value of crypto assets hugely sensitive to volatile conditions in financial markets, it’s clear investing in the crypto Wild West is still a very risky business,” Susannah Streeter, senior markets analyst at Hargreaves Lansdown, wrote in an email.

“Investors should only dabble at the fringes of their investments with money they have to be prepared to lose,” Streeter added.