(Bloomberg) — Bitcoin was trading on either side of $70,000 on Monday following a roller-coaster ride at the end of last week.
The original cryptocurrency was little changed at that level following the wide daily swings of more than 13% that undercut investors confidence. Bitcoin on Thursday plunged to $60,033, its lowest since October 2024, before rallying back above $70,000 on Friday.
Traders remain on edge.
“While cryptocurrency prices have managed to bounce from last week’s lows, there still seems no rush to pick up coins on the cheap,” said Chris Beauchamp, chief market analyst at investing and trading platform IG. He added that “cryptocurrencies need bullish momentum, and despite the recovery last week that is still lacking.”
Last week’s selloff saw Bitcoin volatility surge. The Bitcoin Volmex Implied Volatility Index jumped above 97% 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.
“We expect to see decreased liquidity and nervous markets yielding larger moves in the short term,” said Jeff Anderson, head of Asia at STS Digital. “A dip back below $70,000 is less significant as we wait for the next sustained move either below $62,000 or a break above $76,000.”
Explainer: How Bitcoin’s Volatility Is Testing Crypto’s Appeal
–With assistance from Sidhartha Shukla.
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