After plunging to its lowest level in six months on fears of a Russian invasion on Ukraine and ahead of this week’s Federal Reserve meeting, Bitcoin rose on Monday as investors stepped in to buy the cryptocurrency.
After falling to $32,951, the largest cryptocurrency was last up 2.5 percent at $37,250, its highest price since July 23. Losses from the all-time high of $69,000 in November have already exceeded 50%.
Bitcoin has reached a critical point, according to analysts, where more selling might reverse the long-term bull trend.
On Monday, the euro plummeted due to escalating tensions between Russia and Ukraine. NATO said it was placing forces on alert and bolstering Eastern Europe with extra ships and fighter jets, escalating tensions over Ukraine, which Russia criticised.
Nerves about the Federal Reserve’s two-day policy meeting, which begins on Tuesday, contributed to the mix, as the bank is anticipated to confirm that it will soon begin draining the pool of liquidity that has fueled growth stocks.
“The story is really how severe is the tightening,” said Marc Chandler, chief market analyst at Bannockburn Global Forex in New York, stressing that if the Fed reduces the size of its balance sheet, conditions will tighten along with higher interest rates.
Cryptocurrencies, like other risk assets, have fallen since “people are pushing back on risk in general,” he noted. In midday trade, stocks also rallied off their lows.
Close this week above the $37,400 mark, where there is support from the Ichimoku cloud bottom, according to Katie Stockton, creator of technical analysis firm Fairlead Strategies, may be essential in determining whether the selloff is a correction in an uptrend or the start of a bear trend.
“The long-term upswing is fundamentally reversed by that breakdown,” she warned if Bitcoin fails to rise above this level.
According to Coinglass data, almost $465 million in crypto assets have been liquidated in the last 24 hours, with Bitcoin trades accounting for $167 million of that total.
Smaller cryptocurrencies, which tend to move in lockstep with bitcoin, also fell, but not as much as bitcoin. Ether, the second-largest digital currency, was recently down 3.5 percent at $2,451 after hitting a low of $2,160 on July 27.
Riot Blockchain, Bit Digital, and Marathon Digital, all U.S.-listed cryptocurrency miners, also recovered from previous lows, while crypto exchange Coinbase Global pared most of the day’s losses.