Bitcoin prices came under pressure in 2022 following the collapse of algorithmic stablecoin terraUSD and subsequent bankruptcy filings by lender Celsius and hedge fund Three Arrows Capital.
Nicolas Economous | Nurphoto | Getty Images
Bitcoin hovered around $24,000 on Friday, hitting a 6-week high while continuing to follow stock markets higher.
The world’s largest digital currency hit $24,412 as of 2:30 a.m. ET on Friday, according to CoinDesk data, its highest in more than six weeks. Bitcoin has since pared some of those gains and was just above $24,000 at 6:32 a.m. ET.
Bitcoin’s rally began after the Federal Reserve hiked interest rates on Wednesday, but signaled that the pace of such increases could be slowing. This triggered a rally in US stocks.
Moves in cryptocurrencies have traded broadly in line with US stocks of late, particularly after the tech-heavy Nasdaq, which has surged over the past two days.
Other cryptocurrencies, including ether, were notably higher on Friday.
“Overall, I think the markets have reacted positively to the Fed’s comments and have arguably priced in most of the rate hikes,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC via text message.
“There seems to be a lot of liquidity sitting on the sidelines that is now coming in due to the consolidation/downside pressures of the last few months and is now fading,” he added.
Still, Bitcoin is down about 48% this year and remains more than 60% below its all-time high of $68,990.90 set in November.
The crypto market has been plagued by a number of issues, including the collapse of algorithmic stablecoin terraUSD, which set off a chain of events that led to the bankruptcy of lending platform Celsius and hedge fund Three Arrows Capital.
Market participants are trying to figure out where the bottom is for Bitcoin and if the deleveraging and market shakeout in the industry is over. Market participants told CNBC that they want to see an improving macro picture and the completion of the deleveraging before bottoming is found for Bitcoin.
Bitcoin has been trading in a range from around $18,000 to just over $24,000 since mid-June, and Luno’s Ayyar said investors have been accumulating Bitcoin at those prices.
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