Bitcoin is rallying to levels not seen since the collapse of FTX. What happens next?

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Bitcoin prices have skyrocketed in recent days. Ozan Kose/AFP via Getty Images

Bitcoin and other cryptocurrencies took a breather on Monday after a dramatic multi-day rally that took digital assets to levels not seen since the collapse of crypto exchange FTX sparked a sharp sell-off a while ago. two months.

Bitcoin price rose less than 1% in the past 24 hours to top $20,800. The biggest crypto has soared in recent days, rising from under $17,500 less than a week ago to highs above $21,000 in recent trades. This rise in pop represents a resurgence after two months of subdued activity in the wake of the FTX crash, with Bitcoin hitting a two-year low around $15,500 at the depths of the market sell-off.

Crypto traders are optimistic that the worst of the bear market, which took Bitcoin from its all-time high in November 2021 to near $69,000, may be over.

Some of them may escape the control of cryptos. The correlation between digital assets and equities remains strong, with Bitcoin largely tracking the Dow Jones Industrial Average and S&P 500 over the past year amid a challenging macro backdrop of high inflation, rising interest rates and recession risks. This link should continue.

In the short term, at least, technical analysis of the crypto market suggests Bitcoin has some support, although the rally is not worth pursuing at this point.

Deeply overbought short-term readings are challenging positive momentum, so we won’t continue the rally at these levels, Katie Stockton, managing partner at technical research group Fairlead Strategies, said in a note on Friday.

If Bitcoin is able to hold above its 200-day moving average around $20,000, that would put the next hurdle at $21,500, Stockton said, adding that Bitcoin now has major support at the average. rolling over 50 days of $17,000.

Beyond Bitcoin, Ether is the second largest cryptorose 1% at $1,550. Smaller tokens, or altcoins, exhibited much the same, with Cardano up 1% and Polygon up 3%. Memecoins were more mixed, with Dogecoin less than 1% in the red but Shiba Inu rallying 4%.

Write to Jack Denton at [email protected]

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