Bitcoin broke above $20,000 on Tuesday for the first time in about a week, as cryptocurrencies bounced, along with other risk-sensitive assets, in Asian trade.
The biggest cryptocurrency by market value, bitcoin, was up more than 5% at $20,286. The second-biggest, Ether, rose 4% to a one-week high of $1,389.
Last week, cryptocurrency prices hit new lows as a result of regulatory worries and a general investor reluctance to engage in risky assets due to impending interest rate increases.
By market value, Bitcoin, the most valuable cryptocurrency, dropped almost 5% to a three-month low of $18,387.
The second-largest cryptocurrency, Ethereum lost 3% to a two-month low of $1,285 and had lost more than 10% in the previous day. The majority of the smaller tokens had larger losses.
Over the weekend, a significant upgrade to the Ethereum blockchain—which supports the ether token—called the Merge changed how transactions are handled and reduced energy consumption.
The value of the token has decreased rumors circulated those comments made last week by Gary Gensler, chairman of the U.S. Securities and Exchange Commission, suggested the new structure would draw additional regulation. The upgrades’ surrounding trades were likewise unwound.
The regulatory outlook is speculation, according to Matthew Dibb, COO of Singapore’s Stack Funds cryptocurrency platform.
Since the Merge, the markets have shed a lot of their excitement, he claimed. Given the uneasy global backdrop, he continued, “It’s really been a sell-the-news type of event,” and predicted that ether would test $950 in the near future.
“Right now, the environment doesn’t look fantastic from a basic or technical standpoint. There isn’t a clear imminent bullish catalyst that will support these markets and inject a huge amount of fresh capital and liquidity.”