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| The largest cryptocurrency by market value, rose as much as 5.3% to $20,412 Tuesday, posting its biggest one-day gain since Sept. 27. The token has traded below $20,000 for nearly three weeks, breaking from the coin’s trademark volatility. |
Bitcoin broke above $20,000, ending its longest run below that price index since the token first breached the threshold in late 2020.
The largest cryptocurrency by market value, rose the maximum amount as 5.3% to $20,412 Tuesday, posting its biggest one-day gain since Sept. 27. The token has traded below $20,000 for nearly three weeks, breaking from the coin’s trademark volatility. Other digital assets followed with Ether gaining the maximum amount as 12.8% to trade at $1,525, its highest price in additional than a month. And so-called alt-coins like Solana and Dogeoin also advanced.
“You’ve need to be encouraged by this,” said Stephane Ouellette, chief executive of FRNT Financial Inc, adding that the token “is rallying with risk assets.”
Despite the gains, Bitcoin still remains in its multi-month price slump as central banks hike interest rates to curb rising inflation. The token has lost near 60% of its value since the start of the year.
US stocks also rose on Tuesday as investors assess mixed corporate earnings and weighed risks to economic process . New economic data revealed slumping US consumer confidence, an indication that buyers may slow spending amid recessionary fears and aggressive interest-rate hikes.
Bitcoin’s strong correlation to risk assets like tech stocks has dashed hopes that Bitcoin would function a hedge against inflation. The coin has traded in line with US stocks for much of the year. The S&P 500 Index rose 1.6% on Tuesday. And a 60-day coefficient of correlation for Bitcoin and contracts on the S&P 500 hovered around 0.63. (A coefficient of 1 means the assets are occupation lockstep, while minus-1 would show they’re occupation opposite directions.)
Bitcoin’s 30-day volatility is near a six-year low, consistent with a note by Arcane Crypto’s Vetle Lunde and Bendik Norheim Schei, which could mean a breakout is due. The last time it reached those levels was within the summer of 2020. Bitcoin maintained levels below its current price at the time for four days before “the price exploded up,” said the note.
But whether the token can maintain trading above $20,000 remains to be seen.
“Some people are watching $20,000 for the psychological significance of it,” said Katie Stockton, co-founder of Fairlead Strategies. She said that supported her firm’s models, she would wish to see “consecutive daily closes” above roughly $19,600 to “confirm a minor breakout.”
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