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Cryptocurrency Image. / Photo via Reuters, Yonhap News

Ethereum and Solana, major altcoins, are drawing attention as they surged more than 7% in a single day. While the overall crypto market continues to show weakness, experts projected that high volatility will persist for the time being.

According to the US cryptocurrency exchange Coinbase on the 8th, as of 10:15 AM today, Ethereum is trading at $1,679.65, up 7.5% from the previous day. At the same time, Solana is also recording $65.87, a 6.05% increase compared to the prior day.

The cryptocurrency market has recently faced overall downward pressure due to a combination of factors, including concerns over a US economic slowdown, weakening appetite for risky assets driven by Middle East risks, and institutional capital outflows. In particular, since altcoins suffered sharper declines than Bitcoin, analysts interpret that the influx of bargain-hunting buy orders has led to a relatively larger rebound.

A technical rebound is cited as the primary driver behind the relative upward trend of Ethereum and Solana. In the case of Ethereum, a decrease in the volume held on exchanges positively influenced investor sentiment. This is because a withdrawal of Ethereum from exchanges is generally interpreted as a signal that investors are opting for long-term holding rather than short-term selling. Additionally, the possibility of recent accumulation by institutional investors has fueled market expectations.

For Solana, renewed focus on expectations for network growth is analyzed as the key factor behind its rebound. The outlook that the Solana ecosystem, with its strengths in high processing speeds and low fees, could benefit from the expansion of decentralized finance (DeFi), stablecoins, and tokenized asset markets stimulated investor sentiment.

However, the prevailing opinion in the market is that it is premature to interpret this surge immediately as a signal of a return to a bull market. Markus Thielen, head of crypto research firm 10x Research, analyzed, "The recent rebound strongly bears a technical nature that appears after an oversold period," adding, "Unless the macroeconomic environment and liquidity conditions clearly improve, it is difficult to conclude that this is a definitive shift to an upward trend."

Attention is also focused on whether Ethereum and Solana can break through major resistance levels following this rebound. Experts predicted that high volatility will continue for the time being, as profit-taking sell orders could hit the market after the short-term surge.

Some experts offered an analysis that the market is entering a phase of bottoming out. Geoff Kendrick, head of digital assets research at Standard Chartered, evaluated, "Interest from institutional investors remains intact, and the fundamentals of major blockchain networks also stay robust," adding, "While short-term volatility may persist, the probability of recovery remains high in the medium to long term."

                                                                                                               Kim Min-ju