Bitcoin pulled back after Monday's blockbuster rally, but is still hovering around its highest levels since late January.
The flagship cryptocurrency partly pared earlier losses to trade 0.6% lower at $86,443, having briefly punched through $87,000 in the previous session. Bitcoin has gained over 12% in the past seven days, according to data from Coinglass.
The move caused some market participants to declare an end to the "crypto winter" that has kept prices depressed and sentiment low since October's all-time high.
"Price increases of this magnitude and higher typically denote the beginning of new bull markets rather than bear market recoveries that are eventually capped off," said analysts for Bitfinex in a note published this week.
Monday's surge was partially anchored by fund investors moving capital back into bitcoin ETFs. Coinglass data shows a net inflow of nearly $1 billion into bitcoin ETFs on Monday, with fund inflows exceeding $1.5 billion since the latter half of last week.
Bitcoin's gains reflect a resurgence in risk appetite among investors, but macro conditions remain a counterweight to cryptocurrencies and other commodities.
"Crypto can benefit from liquidity optimism and risk-on flows, but with the Fed, ECB, BOE and BOJ all leaning hawkishly, the asset class remains exposed to any renewed tightening in financial conditions," said Patrick Munnelly, a partner at Tickmill Group, in a note.
Cryptocurrency markets had defied two potential hurdles--a failure to pass the Clarity Act and the Federal Reserve's quarter-point rate hike--to finish last week higher.
The wider blockchain ecosystem is also benefiting from a return of risk appetite, with Strategy Inc. rising roughly 10% since the start of the week. Michael Saylor's bitcoin treasury firm revealed on Monday that it bought $75.7 million of bitcoin last week--its first purchase since Aug. 31.
Other cryptocurrencies have seen sharp gains along with bitcoin - with HYPE, the native token for perpetual futures trading platform Hyperliquid, rising to an all-time high of $96.81 Tuesday. It rose 2.9% for the day.