Bitcoin gained some ground and climbed back above the $ 30,000 mark, which some cryptocurrency traders see as an important level of support.
The largest digital currency rose as much as 3.4 percent and stood at around $ 30,800 in London at 7:30 a.m. on Wednesday. Other cryptos also performed well, including Ether and Dogecoin, while the Bloomberg Galaxy Crypto Index was also in the green.
“The fear in the market was that if Bitcoin fell below the $ 30,000 mark, the price would drop sharply,” said Naeem Aslam, chief market analyst at Ava Trade Ltd. “In reality, we didn’t see it. The Bitcoin price was stable and we didn’t see any panic sales. “
Bitcoin and other cryptocurrencies have fallen since mid-May, wiping their market value by around $ 1.3 trillion. Bitcoin has faced a number of obstacles, including increased regulatory scrutiny in China, Europe and the US, and concerns about the energy required by the computers that underlie it. Investors have also generally become more cautious when it comes to speculative investments.
Bitcoin could still test the USD 25,000 support level in the coming weeks, Ava Trade’s Aslam said.
Bitcoin’s spike this year has shrunk to about 6 percent after falling from nearly $ 65,000 in April. This contrasts with a 15 percent increase in the S&P 500 index in 2021.
Proponents argue that the virtual currency offers inflation protection and will gain wider institutional acceptance. Such narratives have always been controversial and are now being questioned even more, although Bitcoin’s most ardent fans continue to predict great long-term returns.
“Regulatory and environmental concerns are likely to keep Bitcoin strong, but improvements on both fronts should come before the end of the year,” wrote Edward Moya, senior market analyst for America at Oanda, in a note. He added that institutional investors “are ready to place big long-term bets” if a crash toward $ 20,000 is avoided.
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