The cryptocurrency market saw signs of recovery on Friday after a very rough start to 2024, with Bitcoin climbing above the $43,000 level and most major altcoins posting solid gains. 

Bitcoin Jumps Nearly 2%

Bitcoin's price experienced a notable recovery on Friday, climbing above the key psychological level of $43,000. BTC gained 2.00% over the last 24 hours to trade around $42,979 as of writing. The slight gains come after Bitcoin fell to its low levels dipping below $39,000 recently. 

Source: CoinMarketCap

While the gains were a welcome relief, trading volumes declined over 23% across major Bitcoin exchanges. This suggests some lingering hesitation amongst investors despite Bitcoin retaking the $40k handle. Still, BTC has rebounded over 8% from recent lows below $39k, which appeared to be oversold conditions.

Bitcoin now faces resistance around $45k if the relief rally is to continue. Holding above $40k support would help rebuild market confidence in the short term. However, uncertainty persists in broader macro markets that continue to weigh on crypto sentiment.

Ethereum Gains Nearly 2%

Source: CoinMarketCap
 

Ethereum (ETH), the second-largest cryptocurrency, also registered a 1.64% gain over the past day. Ethereum traded around $2,306, slightly above the key $2,300 resistance level. Like Bitcoin, Ethereum prices have stabilized over the past week but remain far below their 2021 highs.

Solana's SOL Token Jumps Nearly 6% as Crypto Markets Rebound

Solana's native cryptocurrency, SOL, saw a strong surge in price on Friday amid the wider relief rally across the crypto markets. SOL gained 4.55% over the last 24 hours to trade around $100.25 as of writing. 

Source. CoinMarketCap

Despite the positive daily gains, trading volumes declined by over 33% across Solana decentralized exchanges. This indicates ongoing uncertainty around the blockchain network, which suffered major technical outages last year, denting user confidence. 

24-Hour Trading Volumes Decline Alongside Price Gains 

Alongside the universal price gains on Friday, 24-hour trading volumes notably declined across most major cryptocurrencies. For example, Bitcoin's trading volume dropped 23.17% to around $19.77 billion. Ethereum trading volume plunged sharply by 27.03% to $8.05 billion.

The divergence between rising crypto prices but falling volumes shows investor uncertainty persists in digital asset markets. Speculative rallies still lack staying power while fundamental demand remains fragile, evidenced by light exchange activity. 

Technical Factors, Short Squeeze Drive Rebound

From a technical perspective, the wider crypto rebound came as bitcoin appeared oversold below $39k. The climbs back above key moving averages seemingly unleashed pent-up buying pressure, allowing Bitcoin to reclaim the $43k handle. 

Industry analysts also cited a short squeeze as driving the relief rally. Significant short positions had built up betting against Bitcoin recovering $40k. The swift move through that level flushed out pessimists with short bets, exacerbating the bounce.

Despite Friday's bounce, cryptocurrency markets remain highly volatile. Prices reacted strongly to sudden shifts in sentiment and leveraged trading this week. The unpredictable price action suggests continued turbulence ahead as investors await clearer macroeconomic signals.