Bitcoin Price Surges Back Above $70,000 After Sharp Drop

Bitcoin jumped back above the $70,000 mark on Friday as investors piled back into the asset class following a volatile week for the cryptocurrency market at large. The $1.3 trillion digital asset is up over 6% today after plunging to nearly $60,000 earlier on Thursday. Ether has jumped more than 7% to above $2,000 while XRP trades at $1.46, up nearly 20%. Market watchers say the worst is over. “While it is difficult to say, conditions appear to be aligning for crypto to bottom,” David Duong, global head of investment research at Coinbase, told DL News. Bitcoin’s crash was brought on by a combination of factors: collapsing leverage, miners forced to sell, AI hype unravelling, quantum computing risks, and the typical four-year boom-bust cycle patterns that Bitcoin investors expect and sell into. Investors grappling with Bitcoin’s volatility quickly began to bemoan a bear market, with some experts saying crypto markets could get thrashed even more. Selloff across the board The downturn wasn’t exclusive to Bitcoin, however. Duong added that gold and silver also got battered in trading this week, as did tech equities across the board. After a tremendous run that took silver to $118 from $74 in January, the precious metal dropped nearly 40% in the past week. Gold, which towered to a fresh price record of $5,500, also pulled back this week, dropping about 13%. Both have since bounced back. Tech equities, which typically move in tandem with Bitcoin as “risk on” assets, also jumped. The Nasdaq was up 2% on Friday. Amid Bitcoin’s decline came President Trump’s announcement for the new Federal Reserve chair: Kevin Warsh. Warsh, who served as a member of the Federal Reserve Board of Governors from 2006 to 2011, has made pro-crypto statements in the past. And despite Warsh previously claiming that interest rates need to be lower, his history as an inflation hawk has spooked investors. “A combination of factors has weighed on sentiment — from Warsh’s appointment as Fed chair to mixed results from tech earnings,” Duong told DL News. Bitcoin making history Experts reckon this week’s Bitcoin crash was an outlier. “The current price action is not just painful; it is unprecedented,” crypto options exchange Deribit’s chief commercial officer Jean-David Peiquignot told DL News. “For the first time in Bitcoin’s history, the market is on track for a third consecutive monthly decline.” Bitcoin’s swift drop — last week it was trading at nearly $83,000 — came as highly leveraged traders got liquidated. In fact, over $2.65 billion in futures positions were closed yesterday, according to CoinGlass data. Peiquignot continued that the number of liquidations this week means that the bottom should be in, although left the door open for more unexpected “macro catalysts” that could lead to more pain. Bitcoin has been grappling with increased volatility since October 10 — the biggest liquidation event in the history of crypto — when over $19 billion in digital asset bets were liquidated. Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.