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

Bitcoin (BTC) neared $23,500, the highest level in over a month, during the early European hours on Wednesday. The gains came as the second largest cryptocurrency ether (ETH) surged to $1,500 earlier this week ahead of the expected “Merge” event in September.

Dogecoin’s DOGE surged 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%, rising above $1.1 trillion.

Outside of majors, ApeCoin’s APE surged 8% as buying momentum from last week’s metaverse game demo continued. Shiba Inu’s SHIB jumped 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 from the current range of 150-175.

“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,” said Alex Kuptsikevich, FxPro senior market analyst, 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,” explained Susannah Streeter, senior markets analyst at Hargreaves Lansdown, in an email.

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