Bitcoin rallied Monday as investors took advantage of the lowest levels in seven weeks to pile back into the cryptocurrency.
The largest cryptocurrency is on track for its biggest gain since March 13 after dropping as low as $47,079 in early Asia trading before rebounding. It rose as much as 9.1 per cent to $52,518 and was trading around $52,000 as of 10:22 am in Hong Kong.
“The world is moving from centralized to decentralized; if you believe in that theme, it means the drop is a great buying opportunity,” said Michael Sikorsky, chief executive officer and founder of Copia Wealth Studios, in a note Friday. “Volatility has always created opportunity, and people keep being surprised by the new highs month over month and year over year.”
The digital asset stumbled after reaching a record $64,870 on April 14, buoyed by enthusiasm from the Coin base Global Inc. listing. It fell below the 100-day moving average late last week for the first time since early October after JP Morgan Chase & Co. cautioned that its upward momentum could be at risk. The collapse of two crypto exchanges in Turkey at the end of last week also may have depressed sentiment amid debate about whether cryptocurrencies could be in a bubble.
“Bitcoin created a large gap down last week that could stick around far longer than bulls would want to see,” said Rick Bensignor, president of Bensignor Investment Strategies, in a note Monday.
The lack of momentum over the weekend continued despite another potential reference to cryptocurrencies from Elon Musk on Twitter on Saturday. “What does the future hodl?” He asked, using a term often seen as meaning “hold on for dear life” that crypto supporters use to refer to buying and holding their digital assets.
Bitcoin has done well over the medium term, retaining a gain of about 70 per cent year-to-date as big-name investors endorse it and institutions from Goldman Sachs Group Inc. to Bank of New York Mellon advance their offerings around cryptocurrencies. JP Morgan’s John Normand reiterated in a note Friday that Bitcoin’s ascent has been steeper than any other financial innovation or bubble of the past 50 years.