In the early hours of Asian trading on Wednesday, Bitcoin (BTC) ascended past the $61,000 mark, spearheading gains among leading digital assets. This resurgence marks a reversal of the steep downturn that characterized the earlier part of this month, with Bitcoin registering an uptick exceeding 3%, according to CoinGecko. Major altcoins such as Ethereum’s ether (ETH), Solana’s SOL, Cardano’s ADA, XRP (XRP), and BNB Chain’s BNB also posted gains, albeit with more modest increases, maxing out at 2.8%. Conversely, popular memecoins dogecoin (DOGE) and shiba inu (SHIB) experienced a modest rise of just 1%, reflecting a more cautious market sentiment towards risk-laden bets.

Bitcoin’s performance outpaced the broader CoinDesk 20 (CD20) index, which tracks the 20 largest tokens by market capitalization, excluding stablecoins, with the index posting a 2.45% increase. However, despite these gains, a sense of apprehension lingers among trading firms, who remain vigilant amidst a week filled with critical economic data, cautioning against potential short-term fluctuations that could derail the current rally.

Read more: Understanding the Bitcoin Price Trends on FintechZoom

“Investors are treading carefully as we approach the release of U.S. CPI data this week,” noted crypto trading firm QCP Capital in a recent Telegram broadcast. “Inflation metrics will be closely monitored to gauge whether the Federal Reserve will opt for a 50 or 25 basis points rate cut in September. The probabilities are now evenly balanced.”

This midweek rebound provided some relief for traders who were reeling from the significant losses sustained during a market-wide 20% decline earlier in August, precipitated by the unwinding of the yen carry trade. Nonetheless, some market strategists remain cautious, warning that the repercussions of the carry trade may not yet be fully realized.

In a recent CNBC interview, Richard Kelly, head of global strategy at TD Securities, expressed his reservations about declaring an end to the carry trade unwind. “I would caution against buying into many of these narratives. We don’t have concrete data to accurately price carry trades at this juncture,” Kelly stated. “I believe there’s still a substantial amount of unwinding to occur, particularly given the yen’s current undervaluation. This will inevitably influence valuations for the next one to two years, with far-reaching effects,” he added.

The Bank of Japan (BoJ) recently raised interest rates for the first time in over a decade, sending ripples through global markets and affecting risk assets, including Bitcoin. The previously low rates had enabled traders to borrow yen at minimal costs, subsequently investing in higher-yielding assets, a strategy known as the carry trade. However, the recent rate hike has diminished the profitability of such trades, triggering a widespread impact across various markets. Bitcoin experienced a dramatic 15% drop within a 24-hour window, one of the largest in recent memory, while other major tokens suffered losses as steep as 22%.

Earlier this month, the BoJ’s deputy governor indicated that the central bank would refrain from further rate hikes amidst volatile markets, which has had significant implications for yen carry trades and risk assets. A former BoJ official has since suggested that the central bank is likely to postpone additional interest rate increases until the following year, signaling a preference for maintaining market stability in the near term.

Beyond Bitcoin, trader sentiment remains bullish on Toncoin (TON). During Wednesday’s Asian trading session, Toncoin saw a 7% increase, as reported by CoinDesk Indices data. Enthusiasts within the Toncoin ecosystem attribute this growth to the expansion of GameFi on the platform and its seamless integration with Telegram, which continues to bolster the token’s momentum.

“The surge in TON gaming activity has shattered previous records in blockchain gaming, driven by the viral social growth on Telegram. Some TON games have already validated significant revenue generation from gameplay, independent of token sales,” stated John Cheang, Asia-Pacific lead at the TON Foundation, in an email interview. He also highlighted TON’s record-breaking blockchain transactions per second as a critical factor in the platform’s scalability.

Ben El-Baz, Managing Director of HashKey Global, an investor in TON-related projects such as Catizen, added that leveraging Telegram’s inherent advantages presents a significant growth opportunity for TON. “Attracting more developers by harnessing Telegram’s capabilities represents a substantial opportunity for the TON ecosystem,” he noted in an email comment.