Bitcoin rallies to levels not seen since the FTX collapse. What happens next?

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Bitcoin:
and other cryptocurrencies took a breather on Monday after a spectacular multi-day rally that sent the digital asset back to levels not seen since the collapse of crypto exchange FTX triggered a sharp sell-off two months ago.

The price of Bitcoin is up less than 1% in the last 24 hours to $20,800. The largest crypto has rallied in recent days from below $17,500 from a week ago to a peak above $21,000 in recent trade. This pop high represents a resurgence after two months of subdued activity in the wake of the FTX collapse, with Bitcoin hitting a two-year low near $15,500 amid a market selloff.

Crypto traders are optimistic that the worst of the bear market that took bitcoin down from its November 2021 all-time high of around $69,000 may be over.

Some of that may be out of crypto’s control. The correlation between digital assets and stocks remains strong, with Bitcoin largely following suit

Dow Jones Industrial Average
and:

S&P 500:
amid a tough backdrop of high inflation, rising interest rates and recessionary risks over the past year. It is expected that this relationship will continue.

At least in the short term, crypto technical market analysis shows that Bitcoin has some support, although a rally is not worth chasing at this point.

“Deeply overbought near-term readings challenge positive momentum, so we wouldn’t chase a rally to these levels,” Kathy Stockton, managing partner at Fairlead Strategies technical research group, said in a note on Friday.

If bitcoin is able to hold above its 200-day moving average around $20,000, that would place the next hurdle at $21,500, Stockton said, adding that bitcoin now has primary support at the 50-day moving average of $17,000.

Beyond Bitcoin

Ether
– the second largest crypto rose 1% to $1,550. Smaller tokens or altcoins performed the same as

Cardano
increased by 1% and

Polygon
3% higher. Memecoins were more mixed, with

Dogecoin:
Less than 1% redn., but

Shiba Inu
collecting 4%.

Email Jack Denton at [email protected]