“A reversal or pause by the Fed will buoy risk assets, including Bitcoin,” said Alex Thorn, head of research at crypto financial services group Galaxy Digital.

Crypto traders may also be anticipating tighter supplies of Bitcoin issuance. The software code underlying the token periodically halves the amount of new Bitcoins produced through the process of “mining,” or processing transactions on its blockchain network. The next halving event is scheduled to take place in April or May 2024, reducing the mining “rewards” from 6.25 to 3.125 Bitcoins for each block of transactions.

“We’re about a year away from Bitcoin’s next halving. Historically, these have been bullish events for the digital asset,” says Thorn

Bitcoin, and crypto more broadly, may have been overdue for a rally following a bear market that wiped out more than $2 trillion in token value, pushing Bitcoin down to lows around $16,000 last year. A string of bankruptcies, frauds, and company collapses, punctuated by the implosion of Sam Bankman-Fried’s FTX, depressed demand and trading volume sharply.

Another factor fueling Bitcoin may be the recent banking panic, including the failures of Silicon Valley Bank and Signature Bank. Crypto apostles have long claimed that bank deposits aren’t as safe as Bitcoin, which an individual may own directly through a digital wallet, rather than relying on a bank or intermediary.

In reality, digital deposits have proven far less secure than dollar deposits held in banks. Crypto traders have lost billions of dollars worth of tokens through hacks, frauds, and the collapse of exchanges like FTX. While it’s possible to keep your crypto locked in a digital wallet, to which only you have the keys, many traders offload their tokens to exchanges, which may not keep customer assets segregated, turning depositors into creditors in a bankruptcy proceeding.

These are signs of another crypto bubble inflating. One indicator is that the number of digital wallets holding tiny amounts of Bitcoin has increased much faster than those holding larger quantities. That may be a sign that the rally is being fueled by small-time traders, similar to the “meme stock” frenzy.

The number of wallets holding at least 0.01 Bitcoin—about $300—has risen more than 3% since the start of the year, according to crypto data group Messari. Growth gets smaller as wallets get bigger: the number of wallets holding at least one Bitcoin has grown around 1.5%, while wallets with more than 10 Bitcoin are up just 0.5%.

Analysts are also eyeing targets for Bitcoin that suggest the rally could peter out in the near-term. Katie Stockton, a technical analyst and managing partner at Fairlead Strategies, sees Bitcoin’s upside resistance near $35,900, while its support level stands at $25,200. “We would maintain strict attention to risk management,” Stockton said.

Even crypto bulls see muted gains in the near term.

“I expect Bitcoin to trend between $25,000 and $35,000 until the end of November,” said Sam Yilmaz, co-founder of venture fund Bloccelerate. Yilmaz is more bullish in the longer term, however: “Once the halving takes place, Bitcoin will be on a tear for the next 12 months, going above $150,000,” he predicted.

Ultimately, investors need to contend with some critical questions, including the perennial confusion over why, exactly, prices are behaving as they are, and whether the latest momentum can continue. A far tougher regulatory climate is also emerging in the U.S. with agencies like the Securities and Exchange Commission taking an increasingly hard line on even “blue-chip” crypto companies, like Coinbase Global COIN –3.35%  (COIN).

“The present price pattern is expected to generate…FOMO [fear of missing out] among investors, many of whom have already missed out,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.

There are reasons why an investor may want to get into crypto now: as an expression of risk-on sentiment, a wager on a policy pivot from the Fed, or conviction that Bitcoin will one day fulfill its promise as a true alternative currency and asset. The last may be FOMO, however, and it’s as risky as ever.