Amidst a broad-based market resurgence in Asia, Bitcoin (BTC) ascended above $56,000 early Tuesday, propelled by opportunistic investors capitalizing on Monday’s precipitous downturn. Data from CoinGecko reveals BTC’s 6% surge, marking its most significant 24-hour price escalation since May, and sparking a wider market recovery. Ethereum (ETH) and XRP (XRP) both appreciated by 8%, BNB Chain’s BNB saw a 12% rise, and Solana’s SOL surged an impressive 16%.

The extensive CoinDesk 20 (CD20), an index representing the largest tokens by market capitalization excluding stablecoins, leaped 7.26%, registering over $95 million in trading volumes. Concurrently, Japan’s Topix index surged nearly 10% as the yen depreciated against the U.S. dollar, interrupting a five-day rally. Futures linked to the S&P 500 advanced 1.5%, while the tech-centric Nasdaq 100 climbed 2.1%. Renewed optimism for swifter Federal Reserve rate reductions following Monday’s global market decline appears to have rejuvenated risk appetite.

Despite the buoyant market, crypto analysts remain wary of sustained rallies in major tokens. “A corrective rebound in Bitcoin’s price is possible,” stated Ruslan Lienkha, chief of markets at YouHodler, in an email to CoinDesk on Tuesday. “Nevertheless, this uptick will likely be constrained by prevailing pessimism in the broader markets.”

“Overall, the recent depreciation in Bitcoin’s value is not markedly worse than the Nikkei index’s drop, suggesting that current sentiments are influenced by external factors rather than intrinsic issues within the crypto market itself,” Lienkha explained. “It remains uncertain whether we are entering a bearish phase, with much hinging on the performance of equity markets this month.”

On Monday, both crypto and global stock markets suffered one of their most profound losses in recent years. A robust Japanese yen prompted the unwinding of carry trades, accelerating a sell-off that commenced last week due to geopolitical tensions in the Middle East. Japan’s Topix 100 index experienced its most substantial decline since 2011. Meanwhile, Bitcoin’s yen-denominated price on Tokyo-based bitFlyer exchange plummeted nearly 15%, substantially more than its dollar-denominated price on Western exchanges.

Institutional investors offloaded spot BTC exchange-traded fund (ETFs) holdings amidst a high-volume trading day on Monday. U.S.-listed products witnessed $168.4 million in net outflows, pushing net withdrawals beyond $300 million for the month.