Bitcoin rose on Tuesday following a number of controversial news stories that had pushed the cryptocurrency to a new 2022 low over the weekend.
According to Coin Metrics, the price of bitcoin rose about 4% to $20,881.56. It hit a low of $17,958.05 on Saturday. That was its lowest mark since December 2020.
Meanwhile, ether climbed 1.9 percent to $1,123.44 per coin.
Bitcoin’s price increase is a sign that investors are once again thirsting for risk, even as the crypto lending behemoth Celsius and crypto fund Three Arrows Capital continue to make headlines.
“Willing purchasers have been in cash waiting to buy low-cost coins,” Selini Capital’s Jordi Alexander told CoinDesk in a Telegram message. “They must decide whether they will be able to acquire another 20% cheaper or if this is their chance. They’ll need to chase higher if they wait too long.”
The developments come on the heels of negative cryptocurrency industry news, which began with macroeconomic forces putting pressure on the market. Last week, WTI oil prices rose at a near-record annual pace, and the Federal Reserve raised its key interest rate by three-quarters of a percentage point, the biggest increase since 1994.
Despite the fact that cryptocurrency has risen in popularity at a rapid rate, companies like Coinbase and BlockFi are shutting down. Cryptocurrency firms have been worrying users with their failure to pay debts. Lending services that offer people high returns for depositing cryptocurrencies have been raising insolvency concerns.
In a similar manner to those who are thinking about equities, crypto investors are being cautious around bear market rebounds, with some predicting that the asset class could drop even further before seeing a substantial rebound.
“To put it simply, Bitcoin’s weekend drop was not substantial enough,” said Yuya Hasegawa of Japanese bitcoin exchange Bitbank. “The micro-environment has not altered much since last week’s meeting: There has yet to be a clear indication of price inflation decreasing and the Fed may still drive the economy into recession by raising rates too quickly or just failing to control inflation.”
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