The cryptocurrency market is recovering after a sharp sell-off: BTC and ETH show positive momentum

After a sharp decline in October 2024, the cryptocurrency market is showing noticeable signs of recovery. Bitcoin has surpassed the $67,600 mark, rising more than 3% from its lows, while Ethereum has recovered to $1,950, bouncing off August lows. This dynamic indicates a gradual return of buyers to the market after a sharp sell-off of assets.

Macroeconomic Context and Risk Asset Volatility

The recovery of cryptocurrencies occurs against a backdrop of a complex macroeconomic situation. Tech stocks continue to face pressure, and risk appetite remains limited. Interestingly, precious metals and crypto assets are showing parallel trends, indicating an increasing de-dollarization of global capital. Investors are actively shifting funds from the dollar into alternative assets, which traditionally supports prices for Bitcoin and other cryptocurrencies amid rising inflation.

Protective Positions and Hedging in the Derivatives Market

There is intense protective activity in the derivatives market. Traders are establishing put options with extremely low strike prices — down to $20,000 — demonstrating persistent hedging against extreme crash risks. This behavior indicates ongoing panic among market participants despite apparent price recovery. The extreme disparity between optimistic spot movements and pessimistic options bets reflects a divide in sentiment between short-term traders and conservative strategists.

Outlook: Technical Recovery or the Beginning of a New Trend?

Short-term prospects suggest a possible technical rebound driven by deleveraging and natural position reductions. However, sustainable growth will require support from macro liquidity, a recovery in the tech sector, and an influx of institutional capital. The coming weeks will be critical: if the macroeconomic environment remains tense, the current sharp rally could quickly fade. Conversely, if conditions improve and institutional money flows resume, Bitcoin and Ethereum could establish themselves above key psychological levels, opening the way to a new recovery cycle.