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The crypto market is looking a bit calmer today after wobbly market on Monday as investors booked in profit. Bitcoin the most popular cryptocurrency bounced back above $36,000 on Tuesday after suffering its biggest one-day loss since March 2020.
At 1003 GMT on Bitcoin is trading at $36,067.0 with a day high of $36,598.7 on the Investing.com Index. While Ethereum is trading at $1,120.04 with a day high of $1,149.19.
However, the price slid below $35,000 as at 1027 GMT on Tuesday, once again underlining its high level of volatility.
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On Monday Bitcoin sold off nearly down to $30,000, a correction from the top late last week of over 25%. Ethereum the second-largest cryptocurrency by market capitalization after Bitcoin also suffered a sell-off of similar magnitude but has already retraced more than half of the lost territory.
Some analysts attributed the fall on Monday to a stronger. Bitcoin and other cryptocurrencies, similar to many commodities, tend to do the opposite of whatever the dollar is doing.
Strategists at Rabobank said in a note that “the stronger dollar and higher bond yields have also sparked a plunge in Bitcoin and gold prices this morning.”
The correlation between Bitcoin and the dollar index was at -0.95, meaning the two are more likely to move inversely.
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Chief investment officer of cryptocurrency-focused fund manager Apollo Capital Henrik Andersson said the volatility was natural
“If it’s going to reach [$US50,000 to $US100,000], it needs to be volatile. It cannot go up in a straight line to over $US100,000 from where it is today,” Mr Andersson said.
By: Ifunanya Ikueze
