Bitcoin BTC$68,524.42 snapped back near $69,000 on Wednesday, rallying more than 10% from Tuesday’s low as crypto markets staged a broad relief rally after a prolonged stretch of pessimism.

Ethereum's ether (ETH), DOGE$0.1033, native tokens of Solana (SOL) and ADA$0.3050 all posted double-digit gains, extending a move that caught many traders leaning the wrong way.

Digital asset stocks, battered lower in the past months amid falling crypto prices, also enjoyed a relief rally. Stablecoin issuer Circle (CRCL) surged 34% after its earnings report, while crypto exchange Coinbase (COIN) jumped 14%. Strategy (MSTR), the largest corporate holder of bitcoin, climbed 9%, and the ether treasury firm BitMine advanced 12%.

The broad-based rally offered a welcome reprieve after weeks of persistent selling pressure and dread of a next leg lower.

Still, analysts cautioned that despite the sharp bounce across tokens and equities, crypto markets are not out of the woods yet, with key resistance levels and macro risks still looming.

While there was no immediate catalyst behind the Wednesday move, extreme fear and bearish positioning across crypto markets were prime conditions for a violent countertrend advance, according to Joel Kruger, market strategist at LMAX Group.

"Crypto assets have been heavily pressured in recent months and overdue for a technical bounce," he wrote. "The market had built up a meaningful tactical short bias, leaving it vulnerable to sharp squeezes on limited headlines."

Still, Kruger cautioned against calling the rebound the start of a durable uptrend yet.

"Given the abrupt nature of the rally and the absence of a clear trigger — particularly against the backdrop of thinner liquidity conditions — the advance should be treated with caution," he said.

Chasing the rally

Joshua Lim, global co-head of markets at FalconX, said his desk is seeing heavy demand for bullish bets on ether in the options market. Specifically, traders are buying call options and call spreads in the $2,000–$2,200 range over the next two to three weeks, seeking to profit from further near-term upside.

Lim added that some funds are also "chasing this rally" by rotating into higher-volatility altcoins and using options to amplify potential gains — a sign that risk appetite has picked up quickly after the recent rebound.

Adding some complexity, roughly 115,000 BTC options worth $7.49 billion will expire Friday at month-end. The so-called "max pain" — the price level where the largest number of options expire worthless — currently is at around $75,000, Wintermute OTC trader Jasper De Maere noted. The "max pain" point can sometimes act as a magnetic level into expiry, though dealer positioning appears weak, he said.

"Fundamental indicators still remain unconvincing that this strength will see much follow through," De Maere added.

Levels to watch

Technically, bitcoin faces stiff resistance in the $70,000 and $72,000 zone, where recent rallies have stalled as sellers stepped in. Overcoming those levels would be the first challenge in turning the bounce into a durable move higher.

Bitfinex analysts also pointed to $78,000, where the "True Market Mean," an onchain valuation metric to estimate bitcoin’s fair value based on actual capital flows into the network, currently sits.

That level must be reclaimed on a sustained weekly basis before the structural picture improves, Bitfinex analysts said.