KEY POINTS
- Bitcoin topped $22,000 on Monday, its highest level in a month.
- Ether ended the day roughly 9% higher.
- The bitcoin market hoped the recent shakeout was nearing an end.
Finally something positive
Bitcoin went over $22,000 on Monday, its highest level in more than a month. The cryptocurrency market hoped the recent epidemic and shakeout would be almost over.
According to CoinMetrics, the world’s biggest cryptocurrency ended Monday at $21,610.59, an increase of 2.76 percent. Bitcoin reached its highest level since June 16 at $22,757.36.
Other cryptocurrencies also went up, with ether going up 8.94% to $1,466 by Monday night.
A rise in stock prices in Europe and Asia helped boost the hopeful mood. Futures for U.S. stocks were also up. Cryptocurrencies, especially bitcoin, have been closely linked to trade on the stock market. Most of the time, when stocks go up, the crypto market also gets better.
The chaos of the last few weeks
But investors are also watching to see if the chaos of the last few weeks might be over. In the last few weeks, bitcoin has dropped nearly 70% from its all-time high in November, and billions of dollars have been wiped off the market.
Several well-known companies in the space, like the hedge fund Three Arrows Capital and the cryptocurrency lender Celsius, have gone out of business because of the price drop.
These failures have spread throughout the industry and put pressure on other companies in the same field.
This is because there has been a lot of borrowing and leverage in the last crypto cycle. Three Arrows Capital, for example, borrowed the money it couldn’t pay back when the crypto market fell. Celsius offers users rewards of more than 18 percent on digital currency deposited. It undertook high-risk trading to gain money to give back to its subscribers.
To pay off their debts, crypto companies have sold whatever assets they have. This has put pressure on the market as a whole.
Analysts say that there are signs that this spreading might be slowing down.
“The worst of market contagion has likely run its course, with the majority of forced selling behind us,” David Moreno, research analyst at CryptoCompare, wrote in a research note.
Even with the recent rise, the crypto market is still in bad shape. This year, bitcoin and ether have lost more than half of their value. Bitcoin had its worst quarter in the second quarter in more than a decade.
Analysts still aren’t sure that prices will go up significantly soon.
“Given the severely negative performance in Q2, it is unsurprising that a ‘relief’ bounce has occurred. We believe the market will continue range-bound over the coming months,” Moreno said.
