A huge rally in bitcoin as well as ether on Monday drove the cryptocurrency market’s value above the $1 trillion threshold . This was the first time since June 13th.
Investors in crypto should welcome Monday’s gains, since they have been dealing with a terrible bearmarket for the past nine months. The continuing bear market in crypto has wiped out $2 trillion in market value, leading to many bankruptcy among crypto firms such as Voyager Digital and Celsius.
Investor confidence has been eroded due to these bankruptcies and the over 70% price drops in popular crypto tokens. If bitcoin and ether show signs that they are reversing, this could slow down.
Bitcoin rose more than 5% to surpass $22,000 on Monday. This is the highest level it has been since June. It also gives credence the notion that $20,000 could be an important support level. This same level was an area of resistance in bitcoin’s late 2017 bullish rally. Technical analysis shows that old resistance can become new support and vice versa.
ether climbed 12% to $1,500 in anticipation of an upcoming network upgrade. This was due to comments made by an Ethereum Foundation member last Wednesday. The cryptocurrency has risen more than 50% since its lowest point last month.
Investor sentiment is often correlated with prices. If the rally in bitcoin or ether holds, it could attract more investors into the space, creating buying pressure that drives a wide recovery.
As crypto billionaire Sam Bankman Fried lends money to several crypto firms that have experienced funding run dry, including BlockFi, a crypto lender that was too exposed to failed crypto projects during the sell-off, confidence is growing.
On Monday, Bitcoin and Ethereum’s gains gradually spread to other cryptocurrency, with most coins with at least $1 billion market value moving higher than the lower ones, according to data by CoinMarketCap.
The gains in bitcoins and ether spread to crypto stocks such as Cryptobase or MicroStrategy. Both of these stocks saw a 15% increase.
