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Bitcoin price surges as crypto market rallies

The cryptocurrency winter may be thawing after bitcoin pulled off the seemingly impossible amid a horror month.

Experts believe the cryptocurrency winter may be thawing after bitcoin pushed past the all-important US$32,000 price range.

Bitcoin, the top-ranked cryptocurrency, soared eight per cent in 24 hours after being stuck in a bear run for the better part of a month.

Cryptocurrency has been in a rut for most of 2022, but it plunged to new lows for the year earlier this month, after a stable coin plummeted by 98 per cent in the space of just 24 hours – something which should have been impossible.

The cryptocurrency community was left reeling when terra (UST), previously among the top 10 most valuable cryptocurrencies in the world, slumped below $US1 ($A1.42) earlier this month.

Skittish investors pulled out and it left the entire cryptocurrency space in distress, with bitcoin and ethereum briefly reaching levels that hadn’t been seen since June last year.

At one point, bitcoin was trading as low as US$25,400 (A$35,200) per token.

However, on Tuesday morning the coin rallied and was trading at US$32,157 (A$44,000), the highest it has been in more than three weeks.

Experts are “cautiously” optimistic that BTC can push back to US$40,000 (A$55,000).

Market analyst Tony Sycamore from City Index said in a note on Tuesday morning there was some “digital sunshine … breaking through the gloom” of May’s crypto winter after the recent surge.

“Technically, we remain cautiously short-term bullish Bitcoin looking towards $36,000, possibly $40,000, providing Bitcoin remains above the recent $25,400 low,” he wrote.

He pointed out that bitcoin is very “closely correlated” to traditional stock markets.

While the US stock market is closed for the Memorial Day holiday weekend, equity markets climbed and so did bitcoin, according to CoinDesk.

Marcus Sotiriou, analyst at digital asset broker GlobalBlock, was also bullish but put it down for different reasons.

“Bitcoin broke above $30,000, but it needs to hold the $29,300 level on a retest to suggest continuation to the upside,” he said in a note.

“Relief has been long overdue in the crypto market, as the US stock market already rallied last week, after Jerome Powell’s speech that gave the market clarity on their plans to carry out a soft economic landing.”

Mr Powell is the chair of the US Federal Reserve and previously assured US citizens the interest rate wouldn’t rise drastically but gradually to curb inflation.

The surge in price is a far cry from a week ago, when market analysts were all but convinced bitcoin could slump to as low as US$8000.

Guggenheim Investments chief investment officer Scott Minerd warned earlier this month bitcoin could continue its descent to the bottom and could fall as low as $US8000 ($A11,000).

Were that to happen, it would mean the blockchain would shed around 75 per cent of its current value.

“When you break below 30,000 [dollars] consistently, 8000 [dollars] is the ultimate bottom, so I think we have a lot more room to the downside,” Mr Minerd told CNBC.

However, this now looks a long way off.

Read related topics:Cryptocurrency

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