The crypto rally that began on Wednesday continued today, February 26, as investors bought the dip. Bitcoin price jumped to $68,000 from this week’s low of $63,000.
Top Altcoins are Driving the Crypto Rally Today
Top altcoins rebounded by double digits, with Polkadot (DOT), Near Protocol (NEAR), Aptos (APT), and Uniswap (UNI) being the top gainers in the crypto market. These coins soared by over 10% in the last 24 hours. Other top gainers included Cardano, Avalanche, and Internet Computer.
Data compiled by CoinMarketCap shows that the market capitalization of all coins jumped by over 3.78% in the last 24 hours to $2.3 trillion. Still, most of these coins remain in a bear market after falling by double digits from their highest levels this year.
The ongoing crypto market rally is underway as investors buy the dip, now that most coins have tumbled over the past few months. It is common for an asset in a free fall to experience some rebounds.
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In some cases, this rebound marks the start of a new bull market, while in others, it is a dead-cat bounce (DCB). A DCB is a situation in which falling assets briefly rebound and then resume their downward trend.
The crypto rally is also happening as investors embrace a risk-on sentiment across the board. For example, the Dow Jones Index bounced by 307 points on Wednesday. Similarly, the Nasdaq 100 and S&P 500 indices jumped by 56 and 288 points, respectively.
Bitcoin and most altcoins also climbed as some investors predicted that the industry was bottoming. Tom Lee, the Chairman of BitMine, has predicted that Ethereum and other altcoins are about to bottom. Besides, the Crypto Fear and Greed Index has moved to the extreme fear zone. Historically, crypto prices have rebounded when the index moves into the fear zone.
Is This the Start of the Crypto Market Rally?
There are two potential scenarios. First, this could mark the start of a prolonged crypto rally, pushing Bitcoin and other coins much higher in the coming months.
Second, it could be a dead-cat bounce, a situation in which an asset rebounds temporarily before plunging.
The most likely scenario is that this is merely a dead-cat bounce, as the crypto market faces major risks ahead. For example, there is a risk of increased market volatility when the US attacks Iran, which may happen as soon as this week.
Also, technical analysis suggests that Bitcoin and most altcoins remain below all moving averages and the Supertrend indicator. Therefore, this could signal that the sell-off will continue.
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