Bitcoin jumped 8% on Monday after a sharp sell-off over the weekend but continues to teeter around the $20,000 mark, keeping investors on edge.

The world’s largest cryptocurrency was trading at $19,935.98 at 03:20 a.m. ET, according to data from CoinDesk. In the last 24 hours, bitcoin had risen sharply above $20,000 and fallen as low as $18,261.75.

Over the weekend, bitcoin had fallen as low as $17,601.58.

Meanwhile, ether jumped more than 12% and was trading above $1,075 at 03:13 a.m. ET, according to CoinDesk data.

While the rebound will be welcome by investors, bitcoin still sits around 70% below its all-time high hit in November last year and is down 57% year-to-date.

‘Dead cat bounce’

With bitcoin unable to hold convincingly above $20,000, industry watchers said the rally might be short-lived.

Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC that unless the price of bitcoin closes above $23,000 on a daily time frame basis, “the odds are this is a dead cat bounce.”

“We’re oversold, so a bounce was expected,” he said.

The broader cryptocurrency market has been plagued by a number of issues in recent weeks, beginning with the collapse of algorithmic stablecoin terraUSD and associated token luna.

Attention has now turned to crypto lending companies that promise users high yields for depositing their digital coins. Last week, Celsius, a company with 1.7 million customers and nearly $12 billion of crypto assets under management, paused withdrawal of funds for customers, sparking concerns that it is insolvent.

Cryptocurrency companies have announced rounds of layoffs amid the market downturn. Coinbase, a crypto wallet and exchange, said last week it will cut 18% of full-time jobs. A lending firm called BlockFi said last week it will lay off a fifth of its staff.

Macroeconomic factors including high inflation and upcoming rate hikes from the U.S. Federal Reserve are also weighing on the market.

“When inflation is on the doorstep and with rate hikes in the offing, the risks of a recession round the bend are high,” Charles Hayter, CEO of CryptoCompare, told CNBC via email.

“The push me pull you of higher rates sapping cash from mortgaged house owners means people are psychologically bracing and paring back and digital assets are suffering thus.”

“Coupled with this, the pull back in the digital asset ecosystem has uncovered a number of systemic issues.”

Market bottom?

Given the big fall in cryptocurrency prices in the last few weeks, some observers said that a bottom to the market could be close.

Giles Keating, director of Bitcoin Suisse, told CNBC’s “Squawk Box Europe” on Monday that “we’re close to a point where some of the real excess leverage has now been driven out of the system and a bottom can begin to be formed.”

Leverage refers to trading in which investors effectively use borrowed money to make trades. That means investors can get larger exposure to positions with less initial capital. But that’s seen as a risky means of trading as it requires investors to ensure they have enough capital to meet the so-called margin requirements. If they don’t, their position is automatically liquidated. Those liquidations are seen as a big factor behind market moves.

Keating said there is still a risk of further liquidation, but he thinks the majority of the selling is over.

“Now some people are warning that we are still not yet there and that if we were to break significantly lower, that we’d see another wave of liquidations,” Keating said.

“There’s always that risk hovering there. But my feeling, given I think those very very big double digit rebounds we saw, in bitcoin, particularly in ether, I think to my mind that was a sign that a lot of those really big liquidations are now done and that the base really is being formed.”