By Suvashree Ghosh and Matthew Brockett
Bitcoin stabilised above $70,000 on Monday following a roller-coaster ride at the end of last week.
Traders remain on edge.
“Crypto markets have stabilised” but “the market is still uncertain that the worst is over,” said Caroline Mauron, co-founder of Orbit Markets. “$60,000 is the main support on the downside. A break through $75,000 on the upside may signal the end of the bear market.”
Last week’s selloff saw Bitcoin volatility surge. The Bitcoin Volmex Implied Volatility Index jumped above 97 per cent in the largest intraday increase since the collapse of Sam Bankman-Fried’s FTX in 2022.
Extreme volatility is nothing new to cryptocurrencies, but Bitcoin’s slump from a peak of $126,000 in October last year comes despite the backdrop of a crypto-friendly White House and surging institutional adoption. Its failure to act as a safe haven during a period of heightened geopolitical uncertainty has raised doubts that it functions as a kind of “digital gold.”
Still, in a tentative sign of returning optimism, US Bitcoin exchange-traded funds recorded inflows of $221 million on Feb. 6 as investors sought to buy the dip following the market’s dizzying selloff.
“The mood in the crypto market today can best be described as guardedly constructive,” said Sean McNulty, APAC derivatives trading lead at FalconX. “Sentiment at the moment is not overly bearish,” he said, adding the turbulence last week has “purged speculative froth” and left the market “trading on stronger fundamentals.”
Provided Bitcoin remains above its 200-week moving average of $58,000, which it bounced ahead of on Friday, “there is scope for the rebound to extend towards initial resistance at $73,000 to $75,000,” said Tony Sycamore, a market analyst at IG Australia.
“A move above this level would open the way for the rebound to extend toward $81,000,” he said.
