After weeks of being in the red, Bitcoin and Ethereum are climbing.
Bitcoin, the world’s top cryptocurrency by market cap, is $21,663, up roughly 10% in the past week and is up 6% on Thursday alone, per CoinMarketCap data. Similarly, Ethereum has also seen notable gains, up to $1,238 or 7% Thursday and 19% over the past seven-day period.
The rest of the cryptocurrency market appears to be following suit, with Solana up 4%, Polkadot up 5%, Cardano up about 3%, and Dogecoin up 3.% in the last 24 hours.
Blockware analyst Joe Burnett has a few thoughts as to what might be happening. He cited Bitcoin’s correlation with the NASDAQ—which is up 5% in the past five days—as well as recent selloffs from bankrupt firms like Three Arrows Capital creating a “local bottom.”
“This forced selling definitely contributed to creating at least a local bottom that the price could move up from,” Burnett told Decrypt via Twitter DM.
In his view, the Bitcoin mining industry is also impacting the cryptocurrency’s price.
“We’re 30 days into a miner capitulation (according to hash ribbon metric), and there are signs that it is potentially ending soon if the price doesn’t fall further,” Burnett said. “Miner capitulations add to short term sell pressure as miners liquidate their BTC treasuries to continue their operations.”
The ongoing crypto winter has seen cryptocurrencies go to zero, multiple firms file for bankruptcy, a wave of layoffs, and a liquidity crunch. Does this sudden uptick mean market fears are subsiding?
Kraken’s Dan Held seems to think so, arguing that “Mass contagion” of a continued domino effect—where the failure of one crypto company affects another—has been “contained” by FTX, an exchange whose CEO says he still has billions of dollars to deploy toward ailing crypto companies if needed.
Was that the bottom for Bitcoin?
– Mass contagion feels contained w/ FTX – Celsius paying off their BTC loan – Bankruptcies already filed – Inflation fears cooling off
Others are less sure. Will Clemente, Bitcoin analyst for mining firm Blockware, pointed to Bitcoin’s 200 week moving average (WMA) of $22,520 as an important metric. If Bitcoin’s price remains below that value, the price downslide could continue.
“Reaction at 200WMA should be quite telling,” Clemente said.
Reaction at 200WMA should be quite telling.
A reclaim of which, essentially making everything below a deviation, would be a nice swing-long setup for traders and prob triggers some trend algos. Rejection would be no bueno. pic.twitter.com/6DRvWqMMeN