Bitcoin snaps a long losing streak as investors seek a market bottom

Bitcoin moved higher over the weekend as cryptocurrency investors continue to look for a bottom after a rough half year of sales.

The largest cryptocurrency by market value rose 4.3% on Monday to $ 31,278.09, according to Coin Metrics. Ether advanced almost 2% to $ 1,852.64.

Crypto has continued to move in line with stocks. All three major stock averages were also higher on Monday. Investors have held their breath as they have seen the prices of risk assets move higher, unsure whether the movements are temporary or whether a more permanent reversal is finally here.

However, some say it is too early.

“We believe that this rally is a beef trap, and that bitcoin may have a short-term gain, but it is more than likely that it will resume the downward trend we have seen in the last two months,” said Josh Olszewicz, head of research at Valkyrie Investments. “Uncertainty in the global economy due to high inflation and the likelihood of a recession, coupled with the proliferation of central bankers raising interest rates, is likely to force all assets down at least through the end of the summer.”

“We still believe that this confluence of factors is likely to cause bitcoin to fall as low as $ 22,000 before rising later this year, mainly because this level is where many institutions and large corporations bought in, and it is highly unlikely that they will let the trade go too far “under water,” he added.

Last week, bitcoin and ether both went green for their first positive week of nine, according to Coin Metrics. It was the longest losing streak for cryptocurrencies.

Bitcoin has more than halved since its all-time high of $ 68,982.20 in November. It traded in a tight area this year before falling below $ 30,000 this month after the Terra collapse.

“Token prices fell 27% in May, following a 20% drop in April,” JPMorgan Research analyst Kenneth Worthington said in a note on Monday. “The already challenging April environment was exacerbated in May by the collapse of the UST algorithmic stablecoin, which drove a combination of forced sales and uncertainty to negatively impact the broader cryptoecosystem. While trading volume appears to be slightly higher in May from a depressed April, almost all the other growth indicators fell in the last month. “

Worthington also said that crypto “needs a new catalyst” and that it could be the Ethereum merger.

Last month, another JPMorgan strategist, London-based Nikolaos Panigirtzoglou, said he sees about 30% upside for bitcoin after the recent washout.