Bitcoin rallied amid a broad risk-on mood in global markets, trading above $22 000 for the first time since June 8 and testing the upper bound of the tight range where it’s been stuck for the past month.
The largest cryptocurrency jumped as much as 7.5% and was trading at $22 082 at 10:18 a.m. in New York. Ether surged 12% and coins like Avalanche and Polygon also posted double-digit gains. Crypto’s advance echoed the bullish tone in equity markets, with global stocks firmly in the green.
June’s crypto wipeout has given way to a sharp rebound, with Ether up 47% this month and Polygon more than doubling. Clouds still hang over the sector, with persistently high inflation expected to trigger more monetary tightening across the world and last week’s bankruptcy of crypto lender Celsius Network Ltd. serving as a fresh reminder of potential contagion.
Cryptocurrencies’ resilience in the face of seemingly damaging news like last week’s worse-than-expected US inflation report adds to indications that the selloff that lopped some $2 trillion off digital assets may have run its course, some market observers say.
“When the market starts reacting positively to negative news, this is a signal that a local bottom could be in for now, as fear may have caused the news to be priced in,” Marcus Sotiriou, an analyst at GlobalBlock, said in a note on Monday.
Traders are paying close attention to any indication that Bitcoin is firmly breaking out of its recent pattern of swinging between $19,000 and $22 000. The token hasn’t traded consistently above that range since mid-June, when news that crypto lender Celsius Network had frozen withdrawals sparked renewed panic selling.
“I see the current Bitcoin price surge as an intermediate relief or swing rally that has a next resistance level around $25 000, or perhaps $28 000,” said Marcel Harmann, chief executive of THORWallet DEX.
Even so, crypto hasn’t seen a “total capitulation” yet, and Bitcoin could bottom out at around $12 000 this year, “with a longer consolidation period afterward,” Harmann said.