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Bitcoin (BTC) is bouncing back as it fights for content above $ 20,000

Bitcoin continues to trade around the $ 20,000 mark, which keeps investors aware of where the next price will go.

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On Monday, bitcoin jumped 6% after a sharp sell-off last weekend, but continues to hover around the $ 20,000 mark, keeping investors at the border.

The world’s largest cryptocurrency traded at $ 20,770.63 at 7:58 a.m. ET, according to CoinDesk. Over the past 24 hours, bitcoin has risen sharply above $ 20,000 and fallen to $ 19,129.70.

Over the weekend, bitcoin fell to $ 17,601.58.

Meanwhile, according to CoinDesk, the air jumped more than 9% and traded above $ 1152.31 at 7:58 p.m.

While the rebound will be welcomed by investors, bitcoin is still about 70% below its all-time high last November and has fallen 57% since the beginning of the year.

“Dead cat jumps”

Because bitcoin cannot convincingly hold above $ 20,000, industry observers said the rally could be short-lived.

Vijay Ayar, vice president of corporate development and international cryptocurrency exchange Luno, told CNBC that if the price of bitcoin does not close above the $ 23,000 daily period, “most likely it’s a rebound of a dead cat.”

“We are oversold, so a rebound was expected,” he said.

The vast cryptocurrency market has suffered from a number of problems in recent weeks, ranging from the collapse of terraUSD’s algorithmic stablecoin and the associated luna token.

Now the focus is on cryptocurrency companies that promise users high returns for depositing their digital coins. Last week, Celsius, with 1.7 million customers and nearly $ 12 billion in crypto assets under management, suspended withdrawals for customers, raising concerns that it was insolvent.

Cryptocurrency companies have announced rounds of layoffs amid a downturn in the market. Last week, Coinbase, a crypto-wallet and exchange, said it would cut 18% of full-time jobs. Loan company BlockFi said last week that it would lay off a fifth of its staff.

Macroeconomic factors, including high inflation and future rate increases by the U.S. Federal Reserve, also affect the market.

“When inflation is already on the verge and rates are rising fast, the risks of a recession on the turns are high,” said Charles Hayter, CEO of CryptoCompare, CNBC by email.

“The fact that I pushed you to higher rates, which took away the money of the owners of mortgaged homes, means that people are psychologically holding back and retreating, and digital assets are suffering from it.”

“In conjunction with this, the diversion of the digital asset ecosystem has revealed a number of systemic problems.”

The bottom of the market?

Given the big drop in cryptocurrency prices over the past few weeks, some observers said the bottom of the market could be close.

Giles Keating, director of Bitcoin Suisse, told CNBC’s Squawk Box Europe on Monday that “we are close to the point where part of the real leverage is now being pushed out of the system and bottom formation may begin.” “

Leverage refers to trading in which investors effectively use borrowed money to make deals. This means that investors can gain more access to positions with less start-up capital. But this is seen as a risky way to trade because it requires investors to make sure they have enough capital to meet so-called margin requirements. If they do not, their position is automatically eliminated. These liquidations are seen as a big factor behind market movements.

Keating said there is still a risk of further liquidation, but he believes most of the sales are over.

“Now some people are warning that we are not there yet and that if we break much lower, we will see another wave of liquidations,” Keating said.

“There’s always a risk. But my feeling, given that we’ve seen these very big double-digit jumps that we’ve seen in bitcoin, especially on the air, I think it was a sign that many of these really big liquidations have been now done, and that the base is really being formed. ”

Bitcoin (BTC) is bouncing back as it fights for content above $ 20,000

Source link Bitcoin (BTC) is bouncing back as it fights for content above $ 20,000

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