Bitcoin and other cryptocurrencies recovered on Wednesday after a brutal sell-off, with the world’s biggest digital coin climbing back above $30,000.
The price of bitcoin rose 6% in the last 24 hours, to $31,526 at 7:45 a.m. ET, according to Coin Metrics data. Smaller cryptocurrencies ether and XRP also rebounded, up around 9% and 6% respectively. The crypto market saw significant selling on Tuesday, with bitcoin falling below the $30,000 mark for the first time since June 22.
Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno, said Wednesday’s price move was likely a “dead cat bounce,” where an asset briefly recovers from a prolonged decline before continuing to slide. Unless bitcoin can climb above $32,000-$33,000, Ayyar expects more downside, with the top cryptocurrency potentially tumbling as low as $24,000-$25,000.
“We saw broad market rallies across the board last night as well, and I think crypto is just playing off of that,” Ayyar told CNBC.
“In general, there are lot of macro factors weighing down on risk-on assets at the moment — inflation worries, Covid, and with crypto we’ve got more specific worries such as much more regulatory oversight.”