Bitcoin, other cryptos surge after sharp sell-off

Bitcoin and other cryptocurrencies surged Monday after a sharp sell-off at the end of last week.

The price of bitcoin climbed back above $58,000, rising 8.6% in 24 hours to $58,607.75, according to Coin Metrics data.

Other digital assets also rose, with ether jumping more than 9% to $$4,440.99 and XRP up 9% at around 99 cents.

Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, said early reports that the new, heavily-mutated omicron Covid variant came with milder symptoms was giving the market a boost.

“We’re seeing news of the variant being potentially weaker in terms of symptoms in early analysis, which has bolstered the market comeback,” Ayyar said via email. “Hence, smart investors have probably bought this dip.”

Bitcoin last week sank as low as $53,549, its lowest level since early October, amid a broader sell-off in stocks and other riskier assets on the back of fears over the new coronavirus variant.

The world’s largest digital currency was briefly down more than 20% from its recent all-time high of nearly $69,000, officially entering bear market territory. Bear markets are typically defined by a decline of 20% of more from recent highs.

The new Covid variant, first identified in South Africa, has spread to multiple countries including the U.K., Germany and Italy.

The US, UK and other nations have restricted travel with some African countries in response. Britain has also introduced new measures to tackle the new virus mutation, including mandatory mask wearing in shops and public transport in England.

On Sunday, Dr. Angelique Coetzee, the South African doctor who first spotted the omicron variant, described its symptoms as “extremely mild,” soothing fears of a potential return of lockdown restrictions during the holidays.

“The global environment did add to the uncertainty across all risk asset classes as we saw last week, but the bounce back always shows us how strong the uptrend is, which is what we’re seeing here,” Ayyar said.

If bitcoin loses $48,000 to $50,000 on a daily or weekly basis, “that would definitely imply bearishness,” he added. But for now, Ayyar says “we’re still in bull market territory.”

SOURCE: CNBC