(Bloomberg) – Bitcoin broke away from a 12-day decline, facing back over $ 20,000 and leading the cryptocurrency market in a rapid reversal after a record series of declines.
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The world’s largest cryptocurrency rose 16 percent on Sunday, recovering from a sharp drop on Saturday that brought the token to just $ 17,599. Bitcoin was worth about $ 20,400 at 5 pm in New York. The ether, which reached $ 881 on sale, rose 26 percent to $ 1,140, while alternative coins from Avalanche to Solana also enjoyed gains.
“I think we have started to reach levels near the bottom, where institutional investors see an opportunity to buy,” said Paul Veraditakit, a partner in the crypto-focused hedge fund Pantera Capital.
The cryptocurrency market is known for its rampant fluctuations – especially on weekends, when movements can be increased – and the blow of the last two days has provided the latest example. Analysts warn that Sunday’s break could be short: the general tone remains negative, with tightening monetary policy providing macro-collisions and cryptocurrency crises, raising fears of growing stress. Analysts have warned that the break could be short. Even with Sunday’s rally, bitcoin fell more than 30% this month and about 70% from its highest level ever reached in November.
Trading was heavier than normal this weekend, with bitcoin approaching $ 40 billion in 24 hours by noon on Sunday in New York, according to CoinGecko. Last Saturday and Sunday, the volumes amounted to 25.6 billion dollars and 22.5 billion dollars, respectively.
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Bitcoin’s foot down on Saturday pushed the coin below $ 19,511, the peak it reached during its last bullish cycle in 2017, which it reached at the end of the same year. In its approximately 12-year trading history, bitcoin has never fallen below the peaks of the previous cycle. The token also broke the $ 18,300 technical support level, said Katie Stockton, managing partner and founder of Fairlead Strategies. Consecutive weekly losses below that level would increase the risk of falling to the next support of $ 13,900, she added.
As for trading now, Stockton said the short-term technical signal of a “counter-trend” “provides some hope that a rebound will develop in the near future.” However, she warned against buying the downturn, as “momentum is very negative”. Other voices on Crypto Twitter cite $ 20,000 as a key fulcrum that could provide support if picked up and retained over the next few days; otherwise it may be some kind of market ceiling.
The $ 20,000 level is “significant” as it represents the highest level since 2017 and “has acted both as support and resistance many times since,” said Matti Greenspan, founder of Quantum Economics. “If we can rise and stay above that level, it will be a lot of bullshit.”
A toxic mix of bad news cycles and higher interest rates has hurt the cryptocurrency in recent days, leading to a record bit of bitcoin losses in the 12 days ended Saturday. The Federal Reserve raised its key interest rate on June 15 by three-quarters of a percentage point – the biggest increase since 1994 – and central bankers have signaled they will continue to rise aggressively this year in the fight to curb inflation. In addition to the mood, crypto hedge fund Three Arrows Capital suffered heavy losses and said it was considering asset sales or bailouts, while another lender, Babel Finance, followed in Celsius’ footsteps on Friday.
Risk-reduction sentiment can be seen in Tether’s buyout pressure, with the circulation of the widely used stablecoin falling by more than $ 15 billion after the May collapse of the Terra ecosystem, the first major crisis to hit the market this year. prices from CoinGecko. About $ 4.4 billion in these buyouts have come in the last seven days.
The crypto market as a whole is now part of the size it reached at the end of 2021, when bitcoin was trading at nearly $ 69,000 and traders were pouring money into speculative investments of all kinds. The total market capitalization of cryptocurrencies was about $ 900 billion on Sunday, up from $ 3 trillion in November, according to CoinGecko.
(Updates prices, adds $ 20,000 comment.)
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