Bitcoin, helped by possible short squeeze, rebounds from Monday slide

Celebrity Gig


Jakub Porzycki | Nurphoto | Getty Images

The price of bitcoin bounced Tuesday, reversing losses from the previous day that were driven by fears around FTX liquidations.

Bitcoin was last higher by 4.5% at $26,185.72, according to Coin Metrics. On Monday, bitcoin dipped below the key $25,000 support level for the first time since March. The rebound could be fueled in part by investors who were betting against the crypto asset scrambling to cover short positions, in other words, by a short squeeze.

READ ALSO:  The Samsung Galaxy Watch 7 is tipped to get a major health upgrade

Investors have been selling their crypto in anticipation of a hearing Wednesday in which liquidators could be permitted to start selling the assets of FTX and Alameda Research, its sister company. The tokens native to the Solana and Polygon networks are among some of the company’s biggest holdings. On Monday, they fell 3% and 5%, respectively. On Tuesday, they were last higher by about 2.5% each.

READ ALSO:  Ignore telecom tax, Pantami tells firms

There’s still room for disappointment, however. Fairlead Strategies’ Katie Stockton said weakened momentum in the intermediate term could make it difficult for bitcoin to see a durable recovery. With Tuesday’s bounce, the cryptocurrency’s next level to test on the upside is $27,600 — its 50-day moving average.

FTX liquidations aside, the crypto market has recently struggled for meaningful catalysts as investors wait for clearer regulation and attention has shifted back to inflation and economic inputs after a string of stronger-than-expected data points last week renewed concern that the Federal Reserve could raise rates once more before year-end.

READ ALSO:  Nigeria, Saudi sign MoU on energy cooperation

This week, investors get the August consumer price index and producer price index readings on Wednesday and Thursday, respectively.

Categories

Share This Article
Leave a comment