Bitcoin surged to its highest level in two weeks, trading above 30,000 USD, as investors and strategists predicted the digital currency would collapse. As of writing this piece, the most prominent cryptocurrency was up 8.41% at 31,611.80 USD at 4:05 pm IST, its biggest increase since 15th May.
Ethereum and smaller tokens like Avalanche, battered last week while Bitcoin remained largely stable, were also up. Stocks in Asia and Europe soared after China suggested it would relax Covid restrictions.
“Markets have been wailing for a relief rally for a long time,” said Hayden Hughes, CEO of Alpha Impact, a social media trading platform. “BTC has recently spent eight weeks in the red and has become technically oversold to levels we typically see at bear markets.”
Last week, the association between Bitcoin and stocks began to break down, as the S&P 500 Index scored its greatest weekly rise since November 2020, while Bitcoin dropped for the eighth week in a row.
Experts believe this gap will close a bit in the short term with crypto catching up. Ether gained as high as 7.7% on Monday, while Avalanche and Solana climbed as much as 12% and 7% before giving up some of their gains.
“We’re witnessing massive purchasing of Ether and many altcoins on Alpha Impact. These patterns are similar to what we witnessed at the bear market bottom in July 2021 and the local bottom in January 2022,” Hughes added.
Bitcoin’s Ninth Weakly Loss
However, experts believe that Bitcoin volatility will continue if another price breakdown happens.
Bitcoin was expected to conclude the week in the red, extending the largest cryptocurrency’s losing skid to nine weeks. In a trading history dating back to the early 2010s, bitcoin has never gone more than six weeks without a positive return.
“If it can go beyond 30k USD, it may make a run,” said Joe DiPasquale, CEO of crypto fund manager BitBull Capital. “However, if bearish sentiment continues to pressurize it, it could fall below its next support line around 25k USD.”
Terra Luna 2.0 Crashes
Over the weekend, what the badly battered Terra project hailed as a “revival” turned out to be more of a redux, as new LUNA tokens were created and soon plummeted in value.
Terra’s strategy included delivering new LUNA tokens to both holders of the project’s now-depreciated UST stablecoins and holders of older, existing LUNA tokens. The previous coins have been converted into “LUNA classic” under the trading symbol LUNC. The market capitalization for those legacy coins was about 700 million USD, down from almost 40 billion USD two months ago.
According to the website CoinGecko, the new LUNA coins first traded for about 17 USD on 28th May but quickly fell and were trading around 5.28 USD by late Sunday. Some users expressed their uncertainty on Twitter, while others swore to cash out any Terra-related tokens as soon as possible.