Bitcoin jumped, rising in a matter of minutes to its biggest daily gain since July, and other digital currencies surged in a shock rally that followed the largest monthly decline since May. File Image: IOL
Bitcoin jumped, rising in a matter of minutes to its biggest daily gain since July, and other digital currencies surged in a shock rally that followed the largest monthly decline since May. File Image: IOL

Bitcoin posts biggest increase since July in a matter of minutes

By The Washington Post Time of article published Oct 1, 2021

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Bitcoin jumped, rising in a matter of minutes to its biggest daily gain since July, and other digital currencies surged in a shock rally that followed the largest monthly decline since May.

The largest cryptocurrency gained as much as 10% to $47,884 (R714 961) early in New York trading before paring gains. Ethereum, Litecoin and EOS also jumped, with the Bloomberg Galaxy Crypto Index rising as much as 8.9%. Bitcoin had slumped 7.6% in September amid concern about increasing regulatory pressure in China and the U.S.

Traders offered a variety of possible reasons for the gains, while noting that the fractionalized market leaves digital assets vulnerable to volatile price swings. Some pointed to Federal Reserve Chair Jerome Powell's comments Thursday that the central bank had "no intention" to ban cryptocurrencies, while other cited price levels such as moving averages that are closely watched by technical analysts.

"We could be seeing the beginning of some de-correlation with traditional markets here," said Vijay Ayyar, head of Asia-Pacific with cryptocurrency exchange Luno Pte. "Early to say though. But that whole narrative that didn't play out all of last year might just be taking shape. Especially since a lot of the uncertainty with regard to the U.S. debt ceiling, China clampdown, etc. Crypto seems to be in its own bull cycle and continuing higher."

Crypto-related stocks, including Marathon Digital Holdings Inc., Riot Blockchain Inc. and Bit Digital Inc., also gained Friday as Bitcoin surged.

Powell said in a congressional hearing Thursday that he had "no intention" on banning cryptocurrencies. He did, however, add that stablecoins might be appropriate for regulation.

Despite falling in September, bitcoin posted a 25% gain in the third quarter. That compared with a drop of 41% in the prior three months.

Technicians turned to the charts for clues as to where Bitcoin could go next. Antoni Trenchev, managing partner and co-founder of Nexo, a crypto lender, said he was encouraged that the swift move took Bitcoin above its 20, 50 and 200-day moving averages in one quick pass.

In addition, the MACD gauge -- or the moving average convergence divergence -- has turned positive, confirming the upward sentiment shift.

But, Trenchev added, "be cautious, sudden accelerating price action can hastily unwind."

WASHINGTON POST

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