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Wednesday, August 17, 2022

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Bitcoin jumps to highest since the aftermath of Celsius Meltdown

Published Jul 20, 2022


A rally in cryptocurrencies Tuesday took Bitcoin out of a one-month-old trading range and ignited big jumps in smaller tokens commonly referred to as altcoins.

The largest virtual coin climbed as much as 9.1% to $23,439, a level it was last at in mid-June, or just after the collapse of crypto lender Celsius Network. Ether at one point added almost 11%. Solana also achieved a double-digit percentage gain before falling back.

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Bitcoin has struggled to escape a $19,000 to $22,000 range as investors lick their wounds from a rout sparked by tightening monetary policy and exacerbated by the toppling of Celsius and the TerraUSD stablecoin in May. It has retreated from a record high of almost $69,000 in November.

"'I think the worst happened," Galaxy Digital Chief Executive Mike Novogratz said at the Bloomberg Crypto Summit.

A sustained break above could renew the speculative momentum that can grip crypto assets in the blink of an eye. Expectations for Federal Reserve interest-rate hikes are less aggressive now, which may help.

U.S. stocks extended gains as investors assessed the outlook for earnings amid speculation disappointments may be already priced into markets. Bitcoin has been highly correlated to movements in equities.

Ether is extending a rally that began last week after developers of the Ethereum blockchain gave a target for the long-anticipated software update that is projected to lower the network's energy usage.

Altcoins often outperform Bitcoin during rallies and underperform when prices are falling, in part because they're a favorite of more speculative traders and tend to be less liquid.

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"Bitcoin has recaptured the $22,000 level as some short-sellers need to call it quits," Edward Moya, senior market analyst at Oanda Corp., wrote in a note. Cryptos are starting to look attractive now that expectations for Fed tightening have eased, he added.

The recent rebound in Bitcoin has pared its loss this year to about 50%. The overall market value of digital tokens has retaken the $1 trillion level.


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