Bitcoin rebounds, leading other cryptocurrencies higher, after its big dip over the weekend

Bitcoin rebounds, leading other cryptocurrencies higher, after its big dip over the weekend

Bitcoin climbed on Tuesday after pushing the cryptocurrency to new 2022 lows over the weekend.

According to Coin Metrics, the price of bitcoin jumped nearly 4% to $20,881.56. Over the weekend, it dropped to $17,958.05. This was its lowest level since December 2020.

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

The move comes on the heels of bearish headlines for the cryptocurrency industry that were triggered by pressure from macroeconomic forces. Wholesale prices rose at a nearly record annual pace last week and the Federal Reserve raised its benchmark interest rate by three-quarters of a percent, the biggest increase since 1994.

Cryptocurrency companies including Coinbase and BlockFi are laying off employees. Crypto lenders, which promise users high yields for depositing their digital coins, are raising fears of bankruptcy.

In a similar approach to those considering the stock, crypto investors are treading lightly around a bear market boom, with some speculating that the asset class could fall even further before seeing a meaningful rebound.

“Bitcoin’s weekend dip, to put it simply, was not deep enough,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange BitBank. “The macro environment hasn’t really changed since last week’s [Federal Open Market Committee] meeting: there’s still no clear sign of inflation coming down and the Fed is still going too aggressively or simply failing to drive the economy into recession. to control inflation.”

Marcus Sotirio, an analyst at UK-based digital asset broker GlobalBlocks, said that bitcoin is facing resistance at the $21,300 level. He added that if the cryptocurrency can surpass it, it could reach the next target of $23,500 as its short sellers take a squeeze. A “short squeeze” occurs when the price of a heavily short asset begins to rise, and short sellers are forced to buy more assets to cover their positions.

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