After a volatile weekend, Bitcoin has surpassed $40,000 again, reaching its highest level in over two weeks. The largest cryptocurrency in the world rose by up to 4.5% yesterday, reaching $41,020, continuing its rise for a second trading day, with the coin increasing by nearly 9% since Friday. The Bloomberg Galaxy Crypto Index, which tracks some major cryptocurrencies, also rose by 7.7%.
Art Hogan, chief strategist at National Securities, stated, "Returning above $40,000 is technically positive." He explained that "breaking through this level and staying above it is a positive signal," as technical analysts look to set the next target for the cryptocurrency at $42,500, which represents the 200-day moving average, and surpassing it could mean the coin rising to around $50,000.
Cryptocurrencies have faced pressure in recent weeks, with Bitcoin losing about 30% since mid-April, when it hit an approximately $65,000 record. The recent sell-offs were exacerbated by Tesla CEO Elon Musk criticizing the amount of energy used by the servers mining Bitcoin, causing him to backtrack on a previous offer to allow customers to buy Tesla cars using the cryptocurrency. Additionally, increased regulatory scrutiny in China has unsettled traders.
However, prices received a boost earlier this week after veteran hedge fund manager Paul Tudor Jones reaffirmed his confidence in cryptocurrency, stating last year that Bitcoin could be a good hedge against inflation. Jones mentioned in an interview with CNBC: "I prefer Bitcoin as a diversified portfolio... Everyone asks me what I should do with my Bitcoin. The only thing I know for sure is that I want to put 5% in gold, 5% in Bitcoin, 5% in cash, and 5% in commodities."
Over the weekend, Musk influenced the market again, tweeting that Tesla would allow transactions in Bitcoin once it is mined using cleaner energy, stipulating a requirement for mining companies to use 50% clean energy in cryptocurrency mining. The Cambridge Centre for Alternative Finance estimated that 39% of cryptocurrency mining is done using renewable sources, particularly hydropower.
Bitcoin's peers, including Bitcoin Cash, Dash, and Ethereum, also saw gains yesterday.
