Bitcoin Hovers Around $32,000 After Boost From Musk, Ark’s Wood

There’s been “good flow” into crypto but “one day of gains does not make a trend” and more work is needed to get the “FOMO crowd excited,” Chris Weston, head of research with Pepperstone Financial Pty, wrote in a note.

Some $1.3 trillion has been wiped off the market value of cryptocurrencies since mid-May. Bitcoin has faced a range of obstacles, including stepped up regulatory scrutiny in China, Europe and the U.S. and concerns about the energy needed by the computers underpinning it. Investors have also generally become more cautious about speculative assets.

Billionaire Musk said Bitcoin mining is “shifting towards renewable energy” and his company will likely resume accepting it as payment for electric cars.

The token has bounced back after sliding below $30,000 earlier in the week, a round number viewed as a key line of support by technical analysts.

Cautious Sentiment
“The fear in the market was that if Bitcoin breaks below the $30,000 mark, the price will move lower violently,” said Naeem Aslam, chief market analyst with Ava Trade Ltd. “In reality, that is not what we have seen. The Bitcoin price has been stable, and we have not seen any panic selling.”

Scott Minerd, chairman and chief investment officer of Guggenheim Investments, said Bitcoin could yet fall toward $15,000. Steen Jakobsen, chief investment officer at Saxo Bank, said a sustainable break above $32,000 is needed for Bitcoin “to dig itself out of a hole.”

Bitcoin’s advance this year has shrunk to about 10% following a slide from an April record of almost $65,000. That compares with a 16% jump in the S&P 500 Index in 2021.

Proponents argue the virtual currency offers an inflation hedge and will win wider institutional acceptance. Such narratives were always controversial and remain in question, though Bitcoin’s most ardent fans continue to predict big long-term returns.

Source: Bloomberg Business News