Bitcoin surged past the $20,000 level on Tuesday, helping to push the overall value of cryptocurrencies back above $1 trillion. The market has been volatile this week, but appears to be stabilizing somewhat.
The largest cryptocurrency by market capitalization, Bitcoin, rose by 6.1% to reach its highest level in more than a week. Ethereum, Solana, and Avalanche also posted gains.
After a period of relative calm in global markets, stocks, bonds and commodities have all seen gains. This comes as monetary policy tightens in an effort to fight inflation and concerns about a possible recession.
Digital tokens have outperformed traditional assets over the past month, leading some to speculate that the worst may be over for the cryptocurrency market. The MVIS CryptoCompare Digital Assets 100 Index has lost just 1% over the past month, compared to losses of 6% for global bonds, 10% for world stocks, and 11% for commodities.
According to Katie Stockton of Fairlead Strategies LLC, a research firm focused on technical analysis, the short-term gauges suggest a rebound this week. However, she expects the bounce to fail quickly, so she is only moving to a short-term neutral stance.
Bitcoin is currently trading at around $20,000, which is far off its record high of almost $69,000 hit in November 2020. The overall market value of all digital tokens is currently $2 trillion lower than its peak in 2021, according to data from CoinGecko.
James Butterfill, head of research at CoinShares, believes that investor appetite for digital assets is still relatively low. However, he notes that excitement about the upcoming upgrade to the Ethereum blockchain has helped to improve sentiment somewhat.
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