Bitcoin staged a comeback on Wednesday after dipping below $60,000 following its record-breaking rally. The cryptocurrency surged 5% during Asian trading, reaching an intraday high of $66,592. This puts it back in close proximity to its all-time peak of $69,202, set a day prior.
Several factors are fueling the current Bitcoin bull run, including increased investment in US exchange-traded crypto products and the possibility of lower global interest rates.
The approval of several spot bitcoin ETFs by the US Securities and Exchange Commission (SEC) has been seen as a major turning point for the industry. This move comes after a lengthy period of regulatory uncertainty, and some experts believe it could attract more institutional investors who were previously hesitant due to concerns over volatility and lack of mainstream acceptance.
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The positive sentiment surrounding Bitcoin has extended to other cryptocurrencies as well. Ether (ETH), the second-largest cryptocurrency, has seen similar gains, currently trading 5.9% higher at $3,767. Laggard XRP, is also on the rise, climbing 2.9% to $0.61.
However, some caution remains despite the recent gains. The market’s inherent volatility is a concern, as evidenced by the recent dip below $60,000 for Bitcoin.
“That looks like classic bitcoin behaviour – it chews you up then spits you back out,” said Matt Simpson, senior market analyst at City Index.
“A pump and dump to previous record highs wiped out some weaker hands, and I suspect we’re now in the volatile and erratic phase we usually see when it reaches a record high.”
