Bitcoin pares jump amid dip buying in hope of better second half

The largest digital token rallied as much as 11.3% in Asia on Friday, briefly closing in on the $21 000 level.
Image: Bloomberg

Bitcoin dip buyers are hoping things won’t get much worse for cryptocurrencies in the remainder of this year judging by the latest surge in the virtual coin.

The largest digital token rallied as much as 11.3% in Asia on Friday, briefly closing in on the $21 000 level. The climb cooled to 5% as of 1 p.m. in Tokyo, leaving Bitcoin at about $19 660.

Some optimism was also evident for coins such as Ether, Solana and Avalanche, but the crypto universe was off session highs as a bout of risk aversion swept across global markets.

Bitcoin has been gyrating around the $20 000 mark after a 57% slide this year. The retreat has become emblematic of depressed investor spirits as liquidity evaporates amid tightening monetary policy to fight inflation.

Outrageous crypto swings have sometimes buffeted traditional assets this year. This time around, the latest jump higher failed to alleviate the gloom enveloping US equity futures and Asian stocks, which remained in the red.

Bitcoin “could be vulnerable to one more ugly plunge that could have many traders fearing a fall towards the $10 000 area” if the turmoil on Wall Street continues in the third quarter, Edward Moya, senior market analyst at Oanda Corp., wrote in a note.

Such risks aren’t deterring El Salvador: its President Nayib Bukele said on Twitter that the nation had again bought the dip, this time 80 Bitcoins at a price of $19 000 each

Earlier this week, Michael Saylor’s Bitcoin-backed tech firm MicroStrategy Inc. said in a filing it had purchased another 480 coins worth about $10 million at the height of the crypto swoon.

© 2022 Bloomberg

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