Bitcoin recovers to about US$30,000 after shedding weekend weakness

The largest cryptocurrency rose as much as 1.8 per cent to US$30,450 on May 23 in Asia. PHOTO: REUTERS

SINGAPORE (BLOOMBERG) - Bitcoin recovered to around US$30,000 (S$41,300) after spending most of the weekend below that level.

The largest cryptocurrency rose as much as 1.8 per cent to US$30,450 on Monday morning (May 23) in Asia. That was after it fell for seven straight weeks, the longest losing streak since August 2011, according to data compiled by Bloomberg.

That echoed the seven-week decline in the S&P 500. "If the S&P falls some more, that should create one final flush and a great buying opportunity for Bitcoin," Fundstrat Global technical strategist Mark Newton said.

"There is a lot of bearishness and we should be approaching a time when you really want to buy into that in the next couple of months," he added.

Bitcoin has struggled in recent weeks as the Federal Reserve hikes interest rates and inflation remains high, boosting prospects for more monetary tightening.

While the token has been touted in the past as a hedge against inflation, it has proved in recent months to be highly correlated with risk assets like companies in the Nasdaq 100, which has tumbled amid the changing regime.

"Bitcoin is likely to hover around US$29,000 to US$31,000 for the next couple of weeks," said Ms Noelle Acheson and Mr Konrad Laesser of Genesis Global Trading in a note on Friday.

They added that some economic data releases, like United States gross domestic product or inflation measures, "could change the narrative".

Mr Rick Bensignor, president of Bensignor Investment Strategies and a former Morgan Stanley strategist, uses DeMark technical indicators - which compare the most recent maximum and minimum prices to the previous period's equivalent prices to measure demand - to argue that Bitcoin likely will not break higher any time soon.

"I would still expect another four weeks of heaviness," he said in a note on Monday. The May 12 low at around US$25,425 and the bounce from that keep support intact at US$28,900, he said.

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