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A lull in bitcoin’s wild swings in recent days has been viewed by some as a tentative sign that the fragile digital currency may rebound.
The world’s largest cryptocurrency was barely changed on Tuesday at 6:45 a.m. in New York after two consecutive price gains of $ 36,425.
The price fluctuations – measured by the range between the daily high and the daily low – have fallen to their lowest level since the beginning of the year, despite Reports Over the weekend, US financial authorities are preparing to take a more active role in regulating the crypto market. Bitcoin’s 10-day volatility fell to 106% from a high of nearly 162% on May 24th.
“Despite another string of ‘negative headlines’, Bitcoin was up $ 2,000 over the weekend,” wrote Tom Lee, co-founder of independent research firm Fundstrat Global Consultant LLC in a notice to customers. “I can’t help but see this as an increase in the likelihood that Bitcoin has bottomed out as bad news doesn’t make new lows.”
Lee expects Bitcoin to top $ 125,000 before the end of the year, but expects to spike above $ 40,000 as a sign that the digital currency has hit its lows for 2021.
Cryptocurrencies have had some hot months, with Bitcoin more than halving from its mid-April high on concerns about regulation by companies like the US and China and questions about the environmental impact of its energy needs. Prominent advocate of digital currency and Tesla Inc. Founder Elon Musk even went so far as to no longer accept Bitcoin as a means of payment for vehicles.
“Crypto is a tough job right now, the tape is messy, and Bitcoin could easily break one way or another,” Chris Weston, research director at Pepperstone Financial Pty, wrote in a note.
On Thursday, the Governor of the Bank of Japan, Haruhiko Kuroda, said joined the chorus of central bankers questioning Bitcoin after its recent surge and crash. The governor of Sweden’s central bank said Monday that Bitcoin and other cryptocurrencies are unlikely to evade regulators At sight.
Still, some see the weekend’s relative calm as a sign that prices may rebound, even if Bitcoin’s questionable environmental profile has undermined the argument that the token will attract more mainstream investment. It is up about 20% from its May low just above the $ 30,000 mark.
“Regulatory engagement can make some worrying headlines for the market, but the engagement is positive for institutional adoption over the medium term,” said Jonathan Cheesman, head of off-market and institutional sales at FTX crypto derivatives exchange. “At least there are some preliminary positive signs that worst fears have not materialized.”
– With the support of Yakob Peterseil
(Updates the price, adds context.)