Bitcoin has regained some of its footing, rising above the $ 30,000 level that some cryptocurrency traders see as a key support level.
The largest digital currency rose 3.4% and stood at around $ 30,800 at 7:30 a.m. in London on Wednesday. Other cryptos rose as well, notably Ether and Dogecoin, while the Bloomberg Galaxy Crypto Index was also in the green.
“The fear in the market was that if Bitcoin goes below $ 30,000, the price drops sharply,” said Naeem Aslam, chief market analyst at Ava Trade Ltd. “In reality, that’s not what we’ve seen. The price of Bitcoin has remained stable and we haven’t seen any panic selling.”
Bitcoin and other cryptocurrencies have fallen since mid-May, wiping out some $ 1.3 trillion from their market value. Bitcoin has faced a series of hurdles, including increased regulatory oversight in China, Europe, and the United States and concerns about the power required for the computers that underpin it. Investors have also generally become more cautious of speculative assets.
Bitcoin could still test the $ 25,000 support level in the coming weeks, Ava Trade’s Aslam said.
Bitcoin’s lead this year has fallen to around 6% after falling from an April high of nearly $ 65,000. This compares to a 15% jump in the S&P 500 Index in 2021.
Proponents argue that virtual currency offers a hedge against inflation and will gain wider institutional acceptance. Such accounts have always been controversial and are now even more questioned, although the most ardent fans of Bitcoin continue to predict big returns in the long run.
“Regulatory and environmental concerns will likely keep Bitcoin heavy, but improvements on both fronts are expected to occur before the end of the year,” wrote Edward Moya, senior market analyst for the Americas at Oanda, in a note. He added that institutional investors “are prepared to place big bets for the long term” if a dip to $ 20,000 is avoided.