While bitcoin seems to have found a bottom, a quick rally to record highs looks unlikely, analysts told CoinDesk on Wednesday, saying the cryptocurrency now faces price consolidation.

“Bitcoin looks to have bottomed out, having digested most negative news during the recent sell-off from $41,000 to $29,000,” trader and analyst Alex Kruger said.

Prices topped $41,000 early last week before turning south in the latter half after the Federal Reserve’s unexpected hawkish tilt on interest rates.

Bearish sentiment strengthened on Monday after the People’s Bank of China reiterated its crypto banking ban in the wake of the Chinese government’s crackdown on crypto mining. Bitcoin extended the previous week’s sell-off, hitting five-month lows near $29,000 during early U.S. hours Tuesday.

Still, prices had bounced back to $32,000 by the day’s end (23:59 UTC). At press time, the cryptocurrency is changing hands near $33,730, a 3.9% gain on the day, according to CoinDesk 20 data.

With the quick recovery, bitcoin has re-entered the broad range of $30,000 to $40,000 established in the aftermath of the mid-May sell-off. Kruger expects consolidation to continue for some time unless “there is another major bearish China headline.”

Stack Funds is also maintaining a cautious stance despite signs of bargain hunting.

“We have noticed that whales [large investors] are re-entering the market as risk appetite returns,” it said in a research noted published Wednesday. Short-squeeze hunters are also exiting the market, it said.

“We believe bitcoin is very close to the bottom, at least in this current wave,” analysts noted. However, “we will keep a close eye on bitcoin’s price post options expiry, and it will be interesting to see how this will unfold in the first week of July, the start of the third quarter.”

Bitcoin options worth more than $2 billion are set to expire Friday. The monthly expiries have gained prominence this year as volatility-inducing events.

Focus on USD

According to Nick Mancini, a research analyst at Trade the Chain, a continued rally in bitcoin needs a weaker U.S. dollar.

Bitcoin has been one of the major beneficiaries of the Fed’s massive stimulus programs launched a year ago. So a continued recovery in the dollar on fears of an impending Fed tightening could hamper bitcoin’s progress.

“Bitcoin and the dollar index have developed an inverse relationship since the last week’s Federal Reserve meeting,” Mancini said. “We believe that if bitcoin wants to gain strength, given current market conditions, the dollar needs to become weaker.

The dollar index, which tracks the greenback’s value against major fiat currencies, has risen by 1.43% since the Fed meeting. Bitcoin, meantime, is down at least 10% from the pre-Fed highs.

Some observers say the Fed taper fears are here to stay and could keep bitcoin’s gains in check. “Concerns about the outlook for Fed policy and the impact of a shift to less-accommodative policy on account of rising inflation that may not be transitory pose downside risk to bitcoin’s price,” Joel Kruger, currency strategist at LMAX Digital, said.

Also read: China’s Anti-Crypto Crackdown Is Different This Time 

At a minimum, bitcoin needs to see a break above $41,325 to suggest we’ve bottomed,” Kruger said. That was the level the currency reached June 15.