Bitcoin Steady Above $20K After Drop To $17K

After a weekend in which Bitcoin (BTC) experienced realized losses to the tune of $7.3 billion, the largest cryptocurrency has erased all weekend losses and is up over 8 percent to $21,206 in the last 24 hours.

Bitcoin has risen almost 22 percent since Saturday’s low of $17,592, and is currently trading around $21,000.

The BTC price increased more than 4 percent to $20,882, Coin Metrics data showed Tuesday. Over the weekend, Bitcoin reached a low of $17,959. It had not been lower since December 2020.

On Wednesday, Bitcoin climbed after a slew of negative sentiments had lifted the cryptocurrency to a new 2022 low over the weekend.

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Bitcoin Market Selling Pressure

Heavy liquidations in the cryptocurrency market dropped Bitcoin’s price below its all-time high in 2017, placing a heavy load on the whole cryptocurrency industry.

The broader cryptocurrency market did not anticipate such a sharp decline, especially below the “unbreakable” $19,000 support, but the cryptocurrency has, as is occasionally the case, breached the $20,000 barrier.

Image: Crypto Academy

The price actions are a response to the negative press surrounding the bitcoin sector, which began with pressure from macroeconomic forces.

As this developed, the United States Federal Federal Reserve raised its benchmark interest rate by three-quarters of a percentage point, the largest increase since 1994.

Too Early For A Major Turnaround

“This recovery takes out some of the extreme oversold aspect of the cryptocurrency,” Alex Kuptsikevich, a senior market strategist at FxPro, pointed out.

“However, it is too soon to speak of a long-term turnaround: all unfavorable fundamentals remain in place,” he continued.

Crypto total market cap at $881 billion on the daily chart | Source: TradingView.com

The surprising rebound was also largely caused by a lack of selling activity on centralized exchanges, since the vast majority of institutional and individual investors gave up during the weekend trading session, when the Bitcoin network suffered $7 billion in losses.

Similarly to stock investors, crypto investors are treading carefully in the face of bear market rallies, with some expecting the asset class would decline further before experiencing a substantial recovery.

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Craig Erlam, a senior market analyst at Oanda, cautions against growing too comfortable with market gains, despite minor recovery in traditional markets following the Juneteenth holiday market closures on Monday.

Erlam stated in a newsletter, “Everyone is looking for the bottom, but there’s a tremendous cloud of uncertainty over the forecast and the data has not yet shown any good indicators.”

Featured image from Panorama Summit, chart from TradingView.com