Bitcoin edged higher for a third day following this weekend's flash crash, with chart watchers suggesting the rally may push the largest cryptocurrency back to around $55,000.
According to Blooberg data, the coin rose as much as 3.6% to $51,897 on Tuesday, while other smaller tokens also advanced. Bitcoin had dropped as much as 21% on Saturday. The Bloomberg Galaxy Crypto Index of the biggest digital assets gained 5.4% at one point during the session and a gauge of 100 coins added 5.8%.
Bottom line is the most leveraged and speculative marketplace in the world -- cryptos -- flushed out some of the excesses in thin weekend trading and is resuming the more enduring bullish trend.
The market has seen speculative traders 'getting stopped out, and is attracting the more enduring buy and hold types.'"
--- said Mike McGlone, a Bloomberg Intelligence analyst.
It's important to remember that these kinds of pullbacks are part and parcel of a market that is increasingly hungry for excessive risk. Every once in a while, the riskiest parts of the market, in this case mostly meme coins and metaverse tokens, do need to be washed out.”
--- Mati Greenspan, founder and CEO of Quantum Economics, wrote in a note.
Bitcoin's 14-day RSI of 37 shows it is very close to being in oversold territory on a technical basis, a measure investors utilize to identify buying and selling opportunities. Assets are considered overbought if the RSI crosses above 70 and oversold if it falls below 30.
“Let's hope that we've already seen the worst of it.”
--- said Greenspan.
Source: Bloomberg