After this weekend’s flash-crash, Bitcoin rose for the third day. Chart watchers suggest that the rally could push the largest cryptocurrency to $55,000.
On Tuesday, the coin rose by 2.9% to $51,590. Other smaller tokens also rose. Bitcoin dropped by as much as 21% Saturday. Bloomberg Galaxy Crypto Index, which tracks the most important digital assets, gained 5.1% during the session. A gauge of 100 coins also added 5.4%.
Mike McGlone, an analyst at Bloomberg Intelligence, stated that the bottom line was the most speculative and leveraged marketplace in the world. He said that cryptos have “flushed out some of the excesses from thin weekend trading and is now resuming a more enduring bullish tendency.” The market has witnessed speculative traders “getting out” and is now attracting more long-lasting buy-and-hold types.
Bitcoin and other cryptocurrencies soared this weekend amid greater risk-off sentiment, which also included selloffs in many parts of the U.S. stock exchange. This happened because of the fact that spiking inflation is forcing the central banks to tighten their monetary policy. It threatens to decrease the liquidity tailwind which lifted many assets.
Mati Greenspan (founder and CEO of Quantum Economics) wrote that pullbacks are part of a market that is becoming increasingly risk-averse. “Every now and again, the riskiest parts of the market (in this case, meme coins or metaverse tokens) need to be cleaned out.”
After the weekend’s bruising, cryptocurrencies attempted to make a comeback. The Bitcoin 14-day relative strength indicator (RSI) 36 indicates that it is close to being in oversold territory technically. This measure allows investors to spot buying and selling opportunities. Assets are considered to be overbought if their RSI is above 70, and undersold if they fall below 30.
Greenspan stated, “Let’s just hope we haven’t seen the worst yet.”
