Bitcoin rebounds above $78,500; no basis for long-term rally yet: analysts

Bitcoin BTC and other major cryptocurrencies saw a rebound late Monday, clawing back a portion of losses from the sharp market sell-off.

Bitcoin climbed 4.2% in the past 24 hours to $78,662 as of 11:00 p.m. ET Monday, after falling to around $75,000 earlier in the day, according to . Ethereum rose 5.86% to $2,322, while other major altcoins also posted modest gains, though prices remained well below levels seen before the recent downturn.

Analysts cautioned that the move appears more consistent with a technical bounce than the start of a sustained recovery, as macro uncertainty and tight financial conditions continue to weigh on sentiment.

"The rebound reflects post-liquidation short covering, oversold conditions, and stabilization after forced selling. BTC and ETH tend to catch bids first as liquidity concentrates into majors," said Vincent Liu, CIO of Kronos Research. "Momentum can extend short term, but without spot-led inflows and improving macro liquidity, this move is more likely a relief bounce."

The sell-off in the past few days followed a renewed repricing of U.S. interest rate expectations, as markets reacted to hawkish signals around the Federal Reserve's policy outlook and uncertainty surrounding the upcoming Fed chair nomination, according to analysts.

Durability remains questionable

Rick Maeda, research associate of Presto Research, said the rebound reflects a broader easing in risk-off pressure rather than a crypto-specific catalyst.

"After the initial sell-off tied to hawkish Fed repricing, broader risk sentiment improved, with U.S. equities rebounding and a stronger nudging markets back toward risk-taking," Maeda told The Block. "With much of the policy shock already digested, selling pressure eased and crypto moved mechanically higher alongside other risk assets."

Still, Maeda noted that the durability of the current rebound is questionable.

"If the -driven hawkish Fed narrative continues to underpin a firm dollar and elevated yields, the move is more likely a stabilization bounce than trend resumption," he said, adding that the absence of fresh negative catalysts has helped prices hold for now.

Andri Fauzan Adziima, research lead at Bitrue, also struck a cautious tone, calling the rally fragile. "This relief bounce, largely technical with dip-buying into oversold levels around $74,500 for BTC, remains fragile and unlikely to sustain without fresh catalysts such as renewed ETF inflows or macro easing," Adziima said.

Market participants are closely watching upcoming U.S. labor data. Thursday's jobless claims and Friday's non-farm payrolls report are seen as near-term catalysts. "Softer prints could ease yields and the dollar, providing support for risk assets," said Liu of Kronos.