(Bloomberg) — Bitcoin extended a tentative rebound on Wednesday, climbing to a two-week high as traders look for signs that the wider crypto market may be regaining its footing after a prolonged selloff.
The original cryptocurrency rose as much as 2.6% to about $93,965, its highest intraday level since Nov. 17. It later lost some of those gains, trading at around $93,380 in early morning in New York. Ether and other major tokens also edged higher.
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The digital assets market remains on shaky ground after a bruising selloff that began in early October, just days after Bitcoin hit a record of over $126,000. Since then, more than $1 trillion in crypto market value has been wiped out. Still, a measure of optimism is appearing with investors hoping the recovery can build.
“Bitcoin fans will be rightly cautious about this rally in the cryptocurrency, having seen so many false dawns in recent months, but it looks like the recovery in stock market risk appetite is finally leaching across into the crypto space,” Chris Beauchamp, UK chief market analyst at investment and trading platform IG, said in a note. “Last week’s bounce faltered at $93,000, so with the price nudging above this in early trading there is some hope of a more sustained move higher.”
US stock futures point to a second day of modest gains as traders bet that economic data due later on Wednesday will strengthen expectations for an interest-rate cut next week.
Crypto traders have endured a bumpy ride this week. Token prices tumbled on Monday following comments by Strategy Inc.’s Chief Executive Officer Phong Le that the Bitcoin accumulator could resort to selling the cryptocurrency if needed to make debt payments. Strategy, formerly known as MicroStrategy, said later that it was establishing a $1.4 billion reserve to have cash readily available.
Bitcoin then regained ground Tuesday, with traders pointing to Securities and Exchange Commission Chairman Paul Atkins’ plan to unveil the measures behind an “innovation exemption” for digital asset companies, and Vanguard Group’s decision to allow exchange-traded funds and mutual funds that primarily hold cryptocurrencies to be traded on its platform.
Those events, coupled with a new bottom emerging for Bitcoin this week, have created “a series of vital signs of an upward trend forming,” according to FxPro’s Chief Market Analyst Alex Kuptsikevich.
Even so, caution has persisted, with some suggesting that investors bruised by the downturn may be reluctant to chase the move.