Bitcoin (BTC) worth tops $17,000 for the primary time in two weeks

Bitcoin on Wednesday rose to a two-week excessive as traders proceed to weigh up the fallout from the collapse of cryptocurrency alternate FTX.

However one analyst warned that the bounce is probably going only a bear market rally and wouldn’t be sustained.

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Bitcoin topped $17,000 buying and selling at its highest degree since Nov. 15 earlier than paring beneficial properties. The world’s largest cryptocurrency was buying and selling 2% larger at $16,879.50 at round 2:37 a.m. ET.

Different digital cash have been additionally up, together with ether, which rose 5% to $1,271.72.

Vijay Ayyar, vp of company growth and worldwide at crypto alternate Luno, mentioned the transfer larger was doubtless a results of “over leveraged shorts masking.”

Somebody who shorts an asset borrows a few of that asset, sells it at a better worth then buys it again at a cheaper price and banks the revenue from that. A brief masking is when a dealer buys the asset again on the cheaper price. That may trigger the worth of that asset to maneuver larger.

Ayyar mentioned the worth of bitcoin has “hit resistance” at $17,000 and is more likely to go decrease from there.

“That is only a bearish retest,” Ayyar mentioned.

Investor confidence in cryptocurrencies has been hammered after Sam Bankman-Fried’s alternate FTX collapsed and filed for chapter this month, sending shockwaves by means of your complete business.

Contagion from the fallout is spreading. Crypto lender and alternate BlockFi filed for chapter because of publicity to FTX.

Greater than $1.3 trillion of worth has been wiped off the cryptocurrency market this yr, sparked by the failure of the algorithmic stablecoin terraUSD in Could and implosion of hedge fund Three Arrows Capital. The FTX collapse has worsened the state of affairs.

Merchants may also be intently watching the contents of a speech by U.S. Federal Reserve Chair Jay Powell on the Brookings Establishment on Wednesday for clues concerning the central financial institution’s rate of interest plans. If the market thinks the Fed will sluggish the tempo of price hikes, it might toughen threat property similar to shares and bitcoin.