NEW YORK: Bitcoin climbed back above US$70,000, after sinking to a 16-month low earlier, lifted by a sharp rebound in technology shares and precious metals following a global rout that had hammered a broad swathe of risk assets.
The world’s largest cryptocurrency was last up more than 11% at US$70,231, rising as high as US$71,464.96 and recouping losses that pushed it to US$60,017.60, the lowest level since Oct 24, earlier on.
Bitcoin posted its largest one-day gain since March 2023, but was down roughly 8% last week.
“It feels like a day of consolidation for risk assets that have been under pressure last week,” said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.
The digital currency market has struggled for months since a record crash last October sent bitcoin tumbling from an all-time peak and investor sentiment toward these assets has cooled.
Last Friday’s low was its weakest level since early October 2024.
That was just before bitcoin’s rally accelerated as Donald Trump closed in on winning the US presidential election, having signalled his intention to support crypto on the campaign trail.
Market participants, however, were leery about last Friday’s recovery.
The options market showed that investors are anticipating further losses on bitcoin, as demand for downside protection increased.
Data from Derive.xyz, a decentralised options platform, showed a significant build-up of put open interest in bitcoin, or expectations that the price will fall further.
Traders focused on the US$60,000 to US$50,000 strikes for the Feb 27 expiry.
Those bets suggested that investors are wagering that bitcoin will end up near or at those levels by that date.
“It’s a one-way market. Demand for downside protection is extreme,” said Sean Dawson, head of research at Derive.xyz.
“While longer-term fundamentals for bitcoin remain intact, the options market is clearly signalling that this aggressive grind lower may persist in the near term.”
Ether was last up 12% at US$2,068, having similarly slid close to a 10-month low of US$1,753.98 earlier in the session.
The second-largest cryptocurrency was on pace for its largest daily gain since August last year. On the week, however, it was still down more than 9%.
The global crypto market had lost some US$2 trillion in value since hitting a peak of US$4.379 trillion in early October even with last Friday’s bounce-back, CoinGecko data showed, with more than US$1 trillion wiped out over the past month alone.
“Bitcoin drifting back toward US$60,000 is not crypto dying, it is the bill coming due for Treasuries and funds that treated bitcoin as a one-way asset without real risk controls, just as we have seen sharp corrections in self-proclaimed safe-haven assets like gold and silver when leverage and narrative ran ahead of reality,” said Joshua Chu, co-chair of the Hong Kong Web3 Association.
Sentiment toward crypto had been affected by the latest selloff in precious metals and stocks. Bitcoin’s fortunes have also been tied to the broader tech sector.
The price tended to rise, particularly on the back of investor enthusiasm over artificial intelligence. The Dow Jones Industrial Average blew past the historic 50,000 mark last Friday and the S&P 500 ended sharply higher, as Nvidia and other chipmakers soared.
Anthony Pompliano, a major crypto investor and founder and chief executive officer at Professional Capital Management, said the “recent selloff is not nearly as bad as past bear markets.” — Reuters
