• Tue. Aug 2nd, 2022

Bitcoin bounces back, leading other cryptocurrencies higher, after a sharp decline

ByHazel R. Lang

Jun 21, 2022

Selim Korkutata | Anadolu Agency | Getty Images

Bitcoin climbed higher on Tuesday after a slew of negative headlines pushed the cryptocurrency to a fresh 2022 low over the weekend.

Bitcoin price jumped around 4% to $20,881.56, according to Coin Metrics. Over the weekend, it fell to $17,958.05. It was its lowest point since December 2020.

Meanwhile, Ether rose 1.9% to $1,123.44.

The moves come on the heels of bearish headlines for the cryptocurrency industry that began under pressure from macro forces. Wholesale prices rose at a near-record annual rate last week and the Federal Reserve raised its benchmark interest rate by three-quarters of a percentage point, the biggest increase since 1994.

Cryptocurrency companies including Coinbase and BlockFi are laying off employees. Crypto lenders, who promise users high returns for depositing their digital coins, have sparked insolvency fears.

In a similar approach to those eyeing equities, crypto investors are moving slightly around bear market rallies, with some anticipating that the asset class could fall even further before seeing a significant rebound.

“Bitcoin’s weekend decline was, to put it simply, not deep enough,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. “The macro environment hasn’t really changed since last week [Federal Open Market Committee] meeting: There has still been no clear sign of lower inflation and the Fed could still drag the economy into recession by raising rates too aggressively or simply not getting inflation under control.”

Marcus Sotiriou, an analyst at GlobalBlock, a UK-based digital asset broker, said bitcoin was facing resistance at the $21,300 level. If the cryptocurrency can overcome this, he said, it could reach the next target of $23,500 as its short sellers are squeezed. A “short squeeze” occurs when the price of a heavily shorted asset begins to rise and short sellers are forced to buy more of the asset to cover their positions.

Source link