Bitcoin rallied over the weekend as cryptocurrency investors continue to search for a bottom after six months of selling. This comes after a long and continuous series of sharp declines in cryptocurrencies.
Bitcoin up 4.6%
The largest cryptocurrency Bitcoin by market capitalization was 4.6% higher Monday, according to Coin Metrics, while Ethereum advanced nearly 5%.
Cryptocurrencies continue to move in tandem with stocks , as futures contracts linked to major stock averages were higher Monday morning as well. As investors held their breaths as they watched prices rise across risky assets, they were unsure if the moves were temporary or if a permanent reversal was finally here.
Cryptocurrency recovery begins after a series of declines
“Token prices fell 27% in May, after a 20% drop in April ,” Kenneth Worthington, a research analyst at JPMorgan, said in a note on Monday.
Worthington continued, “The April environment that was already challenged in May 2022 was exacerbated by the collapse of the algorithmic stablecoin UST which resulted in a combination of forced selling and uncertainty to negatively impact the broader crypto ecosystem. While trading volume between cryptocurrencies appears to be somewhat higher. In May of the low April, almost all other measures of growth have fallen in the last month.
Turning green in the first positive week
Last week, Bitcoin and Ethereum both turned green in their first positive week after the cryptocurrency index turned red for weeks on end, according to Coin's metrics. This was the longest losing streak ever for cryptocurrencies.
Last month, another London-based strategist at JPMorgan, Nikolaos Panigerzoglu, said he sees a 30% rally in bitcoin after the recent pullback.
Steve McClurg, chief investment officer at Valkyrie Investments, said bitcoin could drop further first, by 30% again.