On Tuesday, Bitcoin’s price experienced a notable rise, tracking the upward trend of broader risk assets. This recovery followed significant losses from the previous session when Bitcoin, the world’s largest cryptocurrency, hit its lowest level in over five months, as reported by News.az and Investing.
Bitcoin surged by 8.2% in the past 24 hours, reaching $55,690.40 at 02:15 ET (06:15 GMT). The cryptocurrency had earlier dipped to $49,000 before starting its recovery. This rebound is attributed to a recovery in the stock markets, which has positively influenced the broader cryptocurrency sector.
Despite this recent upswing, the outlook for substantial Bitcoin growth remains uncertain. Traders are exercising caution amid ongoing concerns about a potential U.S. recession and a prolonged downturn in stock markets. Given its high volatility and speculative nature, the cryptocurrency market is particularly susceptible to capital outflows.
Data from digital asset manager Coinshares reveals that cryptocurrency investment products saw an outflow of approximately $528 million over the past week, primarily affecting Bitcoin and Ethereum. This outflow reflects a broader decline in market sentiment.
Further complicating the situation are reports that the U.S. government may sell at least $2 billion in cryptocurrency tokens. This has raised investor concerns about potential price volatility. Additionally, uncertainty surrounding cryptocurrency regulation, especially in light of the upcoming 2024 presidential elections, is contributing to market caution.
While short-Bitcoin instruments continue to attract investment, other cryptocurrency assets are struggling due to the volatile market environment and broader economic challenges, highlighting the current instability in the market.
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