Bitcoin climbs above US$56,000 amid market turmoil

Bitcoin experienced a brief resurgence today, climbing back above US$56,000 amid a wider downturn in global markets that had caused significant losses across major cryptocurrencies.

The leading digital asset saw an increase of up to 3.48% today, August 6, attempting to recover from a sharp selloff that had driven its value below US$50,000. Ether, the second-ranked cryptocurrency, also faced substantial losses, marking its steepest decline since the collapse of FTX in 2022. As of 10.13am in Singapore, Bitcoin was trading at US$55,770 and Ether at US$2,509, both up nearly 3%.

Despite the uptick, traders remain cautious, awaiting a broader improvement in macro-economic conditions and a reduction in tensions in the Middle East before expecting sustained gains.

The Director of Trading at Arbelos Markets, Sean McNulty noted there has been buying on the dip.

“But generally, sentiment is still cautious on concerns that this is the start of a larger deleveraging process.”

According to Coinglass data, total liquidations in crypto bets amounted to approximately US$1.1 billion on Monday, one of the largest figures since early March this year.

Bitcoin’s significant drop erased more than US$150 billion in value over just 36 hours, leading investors in US exchange-traded funds that hold Bitcoin to withdraw roughly US$423 million from these products.

Some traders remain optimistic about a potential swift recovery. It was only nine days ago that the BTC community was arguably the most bullish it’s ever been as said by Co-Chief Executive Officer and Co-Founder of GSR Markets, Rich Rosenblum. BTC could rally back to US$70,000 plus, just as quickly as it sold off.

Representations of cryptocurrencies are seen in front of displayed words Cryptocurrency market and a decreasing stock graph in this illustration taken on November 10, 2022, reported Bangkok Post.

In related news, the growing influence of cryptocurrencies in Thailand highlights their integration into payment methods and the broader shift towards digital financial services. It notes the changing consumer behaviours towards privacy, facilitated by blockchain technology, and the rise of decentralised business models.