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Bitcoin tops $17,000 for the primary time in two weeks however analysts do not count on the bounce to stay

Greater than $1.three trillion has been wiped off the cryptocurrency market to this point in 2022 because the fallout from the FTX collapse continues to weigh on investor confidence.

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Bitcoin on Wednesday rose to a two-week excessive as buyers proceed to weigh up the fallout from the collapse of cryptocurrency trade FTX.

However one analyst warned that the bounce is probably going only a bear market rally and wouldn’t be sustained.

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Bitcoin topped $17,000 buying and selling at its highest degree since Nov. 15 earlier than paring positive aspects. The world’s largest cryptocurrency was buying and selling 2% greater at $16,879.50 at round 2:37 a.m. ET.

Different digital cash had been additionally up, together with ether, which rose 5% to $1,271.72.

Vijay Ayyar, vice chairman of company improvement and worldwide at crypto trade Luno, stated the transfer greater was probably a results of “over leveraged shorts masking.”

Somebody who shorts an asset borrows a few of that asset, sells it at the next worth then buys it again at a lower cost and banks the revenue from that. A brief masking is when a dealer buys the asset again on the lower cost. That may trigger the value of that asset to maneuver greater.

Ayyar stated the value of bitcoin has “hit resistance” at $17,000 and is prone to go decrease from there.

“That is only a bearish retest,” Ayyar stated.

Investor confidence in cryptocurrencies has been hammered after Sam Bankman-Fried’s trade FTX collapsed and filed for chapter this month, sending shockwaves by means of the whole trade.

Contagion from the fallout is spreading. Crypto lender and trade BlockFi filed for chapter because of publicity to FTX.

Greater than $1.three trillion of worth has been wiped off the cryptocurrency market this 12 months, sparked by the failure of the algorithmic stablecoin terraUSD in Might and implosion of hedge fund Three Arrows Capital. The FTX collapse has worsened the state of affairs.

Merchants can even be intently watching the contents of a speech by U.S. Federal Reserve Chair Jay Powell on the Brookings Establishment on Wednesday for clues concerning the central financial institution’s rate of interest plans. If the market thinks the Fed will gradual the tempo of fee hikes, it might support threat property similar to shares and bitcoin.

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