Bitcoin Nears $60K as Crypto Bounce Accelerates, but Recovery Might Be Choppy

Cryptocurrencies continued their rebound higher on Thursday with bitcoin (BTC) nearing $60,000 for the first time since last weekend's carnage.

Bitcoin advanced 6.4% over the past 24 hours, currently changing hands at $59,500. Ether (ETH) topped $2,600, up 8.8% during the same period, snapping its losing streak against BTC.

The broad-market benchmark CoinDesk 20 Index also booked similar gains, with altcoin majors solana (SOL), near (NEAR), avalanche (AVAX) and filecoin (FIL) up nearly 10%.

Ripple's XRP ran hottest with its 22% surge, driven by optimism on a fresh court decision in a long-running case that weighed on the token's price. Investors were upbeat that a U.S. court ordered Ripple to pay a $125 million fine for violating securities laws, a much smaller fine than the $2 billion the Securities and Exchange Commission requested.

Read more: XRP Jumps 17%, Beating Bitcoin Gains, as Ripple-SEC Case Ends

Market observers pointed to two favorable developments that supported the rally in bitcoin and crypto prices.

A U.S. judge approved on Thursday that FTX and its sister trading firm Alameda Research will pay out $12.7 billion to creditors. Many hope that part of the funds will flow back to crypto markets as former users reinvest the proceedings in digital assets.

Meanwhile, Russian President Vladimir Putin signed a bill that legalizes crypto mining in the country. "Russia seems to be acting to keep up with the US. Nation-level bitcoin FOMO (fear of missing out) is heating up," said Ki Young Ju, CEO of crypto analytics firm CryptoQuant. "Their entry will boost the hashrate, strengthen network fundamentals, and diversify miner politics."

With today's gain, bitcoin has now completely reversed its weekly candle that wicked to as low as $49,000 early Monday to positive.

While there's plenty of time until Sunday's weekly close, if BTC finishes the week around the current prices, it would form a hammer candlestick. That's a bullish chart pattern in technical analysis that often appears at the bottom of downtrends, hinting at a trend reversal.

Some analysts, however, warned that future price action could be choppy.

Caleb Franzen, founder of Cubic Analytics, noted that BTC reached its 200-day moving average cloud that could act as a resistance, arresting the rally.

"I'm hopeful that we can break above this level, but I'm not ignorant to the fact that it can just as easily act as resistance," he said. "Bullish if we break and close above it."

Cryptocurrencies rarely rebound in a straight line after capitulation events such as Monday's crash, K33 Research analyst David Zimmerman pointed out.

"V-shaped recoveries are not the norm, there is no need to rush into new positions," said Zimmerman. "The prices within these wicks are usually revisited, and looking to get positioned into coins showing relative strength during this time is the focus."

"Even if we assume the bottom is in, we are likely in for some chop first," he added.