‘Not going anywhere’ Bitcoin shows signs of life as market stabilises
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On May 12, the collapse of LUNA precipitated a bear market categorised by noted but less significant drops across other currencies. Bitcoin became an unexpected casualty, falling to £26,759.85 – its lowest price of the year so far – in a matter of hours on the same day. Since then, its recovery has proven slow, having recuperated to $28,539.95 as of May 27, but this marks a potentially vital moment for the world’s most valuable cryptocurrency.
Experts have hailed the new high as a support level, where the token will likely remain.
Sam Kopelman, the UK manager for Luno, a global cryptocurrency exchange and wallet, said other sections of the market are following its trajectory.
He said: “This week, the market came up for air after a challenging start to May.
“Bitcoin stabilised in the $28,000 to $30,500 range, and Tether has seen redemptions equivalent to $10bn following the collapse last week.”
“Bitcoin and Ethereum continue to find comfort by moving in a tight tandem, with correlation now sitting at an extreme 0.992.
“All indexes have traded relatively flat in the last couple of weeks – a sign of potential recovery.
“Historically, buying into extreme fear levels in bitcoin has been a profitable strategy.”
The trend has uncovered a double-edged sword, with people’s fears also impacting the market.
Mr Kopelman said: “Bitcoin has also seen continued sell-offs following a fearful market sentiment.
“Investors must remember that past performance is not indicative of future price movements.
“Therefore, as investors begin to re-enter the market, they must remain wary.”
Mr Kopelman also touched on the cryptocurrency market’s resilience, adding high demand will keep it operational.
He said: “Interestingly, updated figures on Cambridge’s Bitcoin mining map have shown that despite China’s ban in 2021, Chinese miners are still producing 21 percent of Bitcoin’s hashrate.
“Banning the industry is proving difficult even for one of the world’s most authoritarian governments.
“It is clear that demand is still high and this is not an industry that is going anywhere, any time soon.”
The market is lightly to see further recovery in the future as Terra Luna operators relaunch the currency.
Do Kwon, LUNA’s founder, has received backing for his plans to split the coin into two blockchains.
LUNA’s original blockchain will host Terra Classic, while a new one hosts Luna Classic.
Blockchain administrators will then distribute tokens from the new version to LUNA and UST holders, and the plan has already helped revive the soon-to-be Terra Classic, which is now on $0.0001251.
The information in this article does not equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.
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