Crypto bulls seem to believe that winter may have passed as several currencies rose sharply after painful weeks that made some investors question the viability of the entire industry.
Bitcoin, the most widely held cryptocurrency, rose as much as 6.2% to once again trade above $21,000 after falling close to $17,000 over the weekend. Ether, the second-most popular token, added 6.5% at one point and hovered around $1,191. Altcoins, including XRP, Cardano, Dogecoin and Polkadot, all rallied as well.
The comeback spurred exhortations on Twitter, where much of crypto discourse happens, to buy the dip and keep the faith even amid the recent brutal selloff that’s seen billions wiped out in value.
Many tweets played up the FOMO aspect of investing in the highly-volatile space. Tuesday’s rise is a case in point, they say, of that if you fail to buy during the big dips — you end up missing the rallies, too.
Still, not everyone was ready to call it a bottom. Quantum Economics Founder and Chief Executive Officer Mati Greenspan, for one, remains cautious.
“I don’t know if what we’re seeing now is a dead-cat bounce, or if it turns out we have a false breakout below $20,000,” Greenspan said. “I think it’s yet to be determined.”
Others pointed to historical precedent, arguing that most Bitcoin bear-market bottoms, though they’re volatile, tend to form quickly:
Even though crypto, has had a rough few months, and other assets, like stocks, have not been immune to market turmoil, the weekend plunge caught many investors by surprise because of the magnitude of the declines. Google Trends data indicates that weekly searches for Bitcoin reached its highest value over the last year.
The head of MicroStrategy Inc., Michael Saylor, weighed in to say that Bitcoin continues to evolve:
While others pointed out that Bitcoin at its infancy traded for a tiny fraction of where it is today:
“There has been a resurgence in extra-medium, social media bullish sentiment, however, it’s not really near the highs at this point,” Greenspan said, adding that if the $20,000 floor holds, then he would be “very bullish.”
©2022 Bloomberg L.P.
Author: Inmanual John Milton