Bitcoin recovered on Monday after slipping below $60,000 last week, with renewed buying by Strategy Inc. helping calm the market.
The cryptocurrency rose as much as 3.8% to nearly $64,200 before giving up part of the gain. It was trading at about $62,800 later in the session. Ether, the second-largest cryptocurrency, climbed as much as 5.6% to around $1,720.
Strategy buying helps sentiment
The rebound followed comments from Michael Saylor, chairman of Strategy, who hinted over the weekend that the company could add to its holdings.
Strategy announced on Monday that it had purchased about $101 million worth of Bitcoin.
The token lost some momentum after the disclosure, but the announcement helped ease concerns among traders.
Those worries had intensified after Strategy revealed a small Bitcoin sale earlier. It was the company’s first sale since 2022 and raised questions about its long-standing approach of holding the asset indefinitely.
Bitcoin fell roughly 7% to $59,101 on Friday. It was the first drop below $60,000 since Donald Trump returned to the White House for a second term in 2024.
The cryptocurrency lost about 18% over the course of last week.
Several factors weighed on prices:
- Outflows from Bitcoin-linked exchange-traded funds.
- Renewed geopolitical tensions.
- Concerns about the sustainability of Strategy and other digital-asset treasury companies, a major source of demand for cryptocurrencies.
Bitcoin is now down about 50% from its peak above $126,000 in October last year.
Markets react to Middle East tensions
News of Israel’s retaliatory strike on Iran on Monday also eased some pressure on Bitcoin and other risk assets.
Stocks and bonds across Europe and Asia declined after the attack. US stock futures, however, recovered following a selloff in technology shares.
Daniela Hathorn, senior market analyst at Capital.com, said Bitcoin had been relatively resilient compared with global equities.
“While global stock markets have pulled back as investors reduced risk heading into the weekend, Bitcoin’s reaction has been comparatively muted, particularly considering its reputation as a high-beta risk asset,” Hathorn said.
She said the recent correction in Bitcoin may have insulated the token from some of the turmoil affecting stock markets.
According to Hathorn, equities had recently reached fresh highs and had more positions to unwind once sentiment weakened.
Investors remain cautious
Some investors are still unconvinced that the recovery will last.
Richard Galvin, executive chairman of crypto investment firm DACM, said the company had reduced positions and raised cash holdings to their highest level in two years.
“We reduced our portfolio across the board and increased our cash levels to the highest they have been in two years,” Galvin said.
Pratik Kala, a portfolio manager at digital-asset hedge fund Apollo Crypto, said confidence remains fragile.
“Sentiment is incredibly shaky,” Kala said, adding that much will depend on Strategy’s long-term plans.
TL;DR:
Bitcoin climbed back above $60,000 after Strategy bought another $101 million worth of the cryptocurrency. The rebound followed last week’s sharp decline, though investors remain cautious amid geopolitical tensions and concerns about demand.
AI summary:
- Bitcoin rose to nearly $64,200 before easing to around $62,800.
- Strategy announced a $101 million Bitcoin purchase.
- Bitcoin had fallen below $60,000 for the first time since Trump’s 2024 election victory.
- Israel’s strike on Iran helped ease pressure on risk assets.
- Investors say sentiment in the crypto market remains fragile.
