After Bitcoin (BTC) endured a weekend of $7.3 billion in realized losses, the largest cryptocurrency has wiped out all of its weekend losses, rising more than 8% over the past 24 hours to $21,206.
Bitcoin has gained nearly 22 percent since Saturday’s low of $17,592 and is currently trading around $21,000.
BTC prices rose more than 4 percent to $20,882, Coin Metrics data showed on Tuesday. Bitcoin fell to a low of $17,959 over the weekend. It hasn’t been lowered since December 2020.
Bitcoin rallied on Wednesday after a string of negative sentiment lifted the cryptocurrency to a fresh 2022 low over the weekend.
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Bitcoin market selling pressure
The massive liquidation in the cryptocurrency market has pushed bitcoin’s price below its 2017 all-time high, weighing heavily on the entire cryptocurrency industry.
The broader cryptocurrency market wasn’t expecting such a sharp drop, especially below the “unbreakable” $19,000 support level, but the cryptocurrency has occasionally breached the $20,000 barrier.
Image: Crypto Academy
The price action is a response to the negative news surrounding the Bitcoin industry, which started under pressure from macroeconomic forces.
As the situation unfolded, the Federal Reserve raised its benchmark interest rate by three-quarters, the largest increase since 1994.
It’s too early for a major turnaround
“This recovery removes some of the extreme oversold side of cryptocurrencies,” noted Alex Kuptsikevich, senior market strategist at FxPro.
“However, it’s too early to talk about a long-term turnaround: all the unfavorable fundamentals remain,” he continued.
Crypto total market cap at $881 billion on the daily chart | Source: TradingView.com
The surprising rally was also largely due to the lack of selling activity on centralized exchanges, as the vast majority of institutional and individual investors abandoned the Bitcoin network during the weekend trading hours, when the network suffered a $7 billion loss .
Similar to stock investors, cryptocurrency investors are treading cautiously during a bear market rally, with some expecting the asset class to fall further before experiencing a sharp recovery.
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Craig Erlam, senior market analyst at Oanda, cautioned against getting too comfortable with market gains despite a modest recovery in traditional markets after markets were closed for the June holiday on Monday.
“Everyone is looking for a bottom, but there is huge uncertainty in forecasts and the data hasn’t shown any good indicators,” Erlam said in a newsletter.
Featured image from Panorama Summit, chart from TradingView.com