The rise comes after bitcoin’s price went as low as $47,272 on Sunday
Bitcoin was up Tuesday despite lower-than-average spot volumes. Meanwhile, ether’s price hits record high and the cyrpto’s dominance is back at February levels.
The price of bitcoin climbed as high as $55,261 around 17:00 GMT before settling to $54,840 at one time.
It’s possible the world’s largest cryptocurrency by market capitalization could be headed higher.
A test of the $56,000 mark will soon follow, then will most likely roll back, said Constantine Kogan, a partner at investment firm Wave Financial.
The rise this week comes after bitcoin’s price went as low as $47,272 on Sunday.
Stefan Coolican, chief financial officer for investment firm Ether Capital, says dumps and recoveries are just part of the crypto market. I think the weekend sell-off was overdone, personally, so a bounce back makes sense, Coolican said.
Spot bitcoin exchange volumes for Tuesday were around $2.6 billion at one time, compared with the past three months’ average of $5.1 billion of BTC changing hands daily.
It’s possible larger players are the ones in the market this week, with retail and new investors remaining cautious because of crypto’s notorious gyration. This caused lower volumes Tuesday.
Bitcoin is an information-asymmetry environment, Wave’s Kogan said. A small number in the community are aware of impending price changes, and only a small number of global venues are able to manage these large trades.
Despite the volume doldrums, a positive news cycle is affecting bitcoin’s price, Kogan said.
JPMorgan is preparing to launch an actively managed bitcoin fund for high-net-worth clients, Kogan said. Tesla announced the sale of part of [its] bitcoins and profit taking, which is also positive. This helps the bullish trend.
The second-largest cryptocurrency by market capitalization, ether, was up Tuesday, trading around $2,631 and climbing 5.2% in 24 hours.
Ether rose Tuesday to a record high price near $2,700 after a powerful three-day rally.
The new high came after three straight daily gains totalling 19%. The move extended the cryptocurrency’s stunning rally this year. Ether’s price has tripled thus far in 2021, in part thanks to trader enthusiasm over growth in decentralized finance (DeFi) and non-fungible tokens, both of which use the Ethereum blockchain. Bitcoin (BTC), by comparison, is up 89% this year.
Ether has picked up its head and looks poised for a few more days of outperformance, said Katie Stockton, a technical analyst for the consulting firm Fairlead Strategies.
Technical progress on Ethereum may be enticing investors to buy, said Ether Capital’s Coolican.