Bitcoin above $65,000: can the rebound hold?

The queen of cryptocurrencies has been in good shape for several days. Is this increase solid? BFM Crypto takes stock.

Despite the turbulence at the start of last week, bitcoin has experienced a new rebound in recent days. But for how long? At 10:15 a.m. this Tuesday, May 7, the queen of cryptocurrencies is trading around $63,680, after having exceeded $65,000 on Monday. In its rise, bitcoin carried the entire market, with certain altcoins making good gains over a week, like solana which gained 15%, but also dogecoin, up 10%.

How to explain the rebound of bitcoin? The increase in assets began on Wednesday, May 1, after the Federal Reserve (Fed) in the United States ruled out a further increase in rates, in other words monetary tightening, during its next meetings.

The rebound intensified on Friday May 3, after the publication of the American employment report, which was lower than expected. Which would therefore push the Fed to adopt a more accommodating monetary policy. “This generated a relaxation in American rates and the American dollar. There was therefore a mechanical effect on bitcoin,” Alexandre Baradez, chief analyst at IG, underlined Monday in the BFM Crypto club.

Prudence

Despite this mild context, investors are encouraged to remain cautious.

“The rebound will not necessarily hold if the inflation figures in the United States do not follow the trend that we have observed in the American employment figures,” points out Alexandre Baradez.

“If inflation does not improve more than what the market or the Fed expects, we risk having a resilience of the dollar and rates. This is not the best environment for bitcoin to regain its records” , points out the latter. However, “the range of $50,000 – $60,000 remains a good accumulation zone to play the next bitcoin rally,” he concludes.

“We are waiting to see if Friday’s momentum continues this week and takes the price above the $66,800 level to reach a ‘higher high,’ or if the resurgence was short-lived and prices return to 60,000 dollars and below”, points out Simon Peters, market analyst at Etoro in a note published this Tuesday.

The queen of cryptocurrencies has gained 56% since the start of the year, driven by investors’ optimism regarding new financial investments, spot bitcoin ETFs in the United States. Since April 30, Hong Kong has also offered this type of financial product, which could also contribute to an increase in assets. However, bitcoin remains 14% lower than its absolute record reached on March 14, at $73,750.