The total value of the crypto market has surged in recent weeks as bears start to buy back in and bulls 'hold on for dear life'

Bank of America analysts stated that the recent surge in the total value of the market may be a sign that bears are starting to buy back in as bulls hold on for dear life.

The market is facing a steep sell-off that has wiped out $2 trillion from the digital asset market since it peaked at $69,000.

BofA analysts said in a note Monday that investors may return after the sell-off. In the two weeks ending July 26th, the total market value of cryptocurrencies increased by 9% to $969 billion, and the top five layer 1 token increased by 17%.

The total value of the space was down by over 50% from the beginning of the year and the top 5 token were down by over 50%. The recent change of pace shows optimism among investors.

The bank's analysts said in the note that the digital asset correction appears to be discounted and investors are moving away from the sidelines.

Inflation may have peaked, and investors seem to be encouraged. The central bank hiked the rate by.75 points last week after the inflation data showed a spike. The jumbo rate hikes in June and July have led to some hope that the Fed's inflation fight will begin to show results in the coming months. The central bank may be able to pull off a soft landing for the economy according to some commentators.

"Our view is that risks related to rising rates, inflation, and a mild recession are likely discounted, but a hard recession may result in another risk asset correction," the note stated.

The sector's extreme volatility was demonstrated by the 20% dip in the market since mid- May.