(Bloomberg) — Bitcoin rallied Monday as investors took advantage of the lowest levels in seven weeks to pile back in.
The largest cryptocurrency is on track for its biggest gain since Feb. 8 after dropping as low as $47,079 in early Asia trading before rebounding. It rose as much as 9.6% to $52,747 and was trading around $52,500 as of 12 p.m. in Hong Kong.
“The world is moving from centralized to decentralized; if you believe in that theme, it means the drop is a great buying opportunity,” said Michael Sikorsky, chief executive officer and founder of Copia Wealth Studios, in a note Friday. “Volatility has always created opportunity, and people keep being surprised by the new highs month over month and year over year.”
The digital asset stumbled after reaching a record $64,870 on April 14, buoyed by enthusiasm from the Coinbase Global Inc. listing. It fell below the 100-day moving average late last week for the first time since early October after JPMorgan Chase & Co. cautioned that its upward momentum could be at risk. The collapse of two crypto exchanges in Turkey at the end of last week also may have depressed sentiment amid debate about whether cryptocurrencies could be in a bubble.
“Bitcoin created a large gap down last week that could stick around far longer than bulls would want to see,” said Rick Bensignor, president of Bensignor Investment Strategies, in a note Monday.
Billionaire Elon Musk, who is the past has affected crypto prices with comments on Twitter, posted another potential reference to cryptocurrencies on Saturday. “What does the future hodl?” He asked, using a term often seen as meaning “hold on for dear life” that crypto supporters use to refer to buying and holding their digital assets.
Bitcoin futures weren’t pricing much more in the way of further gains Monday. April contracts rose to $52,345, while those for May through September were in the $52,000s, according to data compiled by Bloomberg. Aggregate CME futures open interest had moved higher last week after falling on April 20 to the lowest level since March 11.
Some cryptocurrency-linked stocks rose along with Bitcoin. Monex Group Inc. gained 5.9%, while Remixpoint Inc. increased 8.8% and Ceres Inc. added 5.7%.
Bitcoin has done well over the medium term, retaining a gain of about 80% year-to-date as big-name investors endorse it and institutions from Goldman Sachs Group Inc. to Bank of New York Mellon advance their offerings around cryptocurrencies. JPMorgan’s John Normand reiterated in a note Friday that Bitcoin’s ascent has been steeper than any other financial innovation or bubble of the past 50 years.
(Updates prices and context throughout.)
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