Bitcoin rebounded sharply on Monday after testing multi-month lows over the weekend, as a highly volatile crypto market resumed its sharp correction.
Bitcoin (BTC/USD) rose 6.2% to $2,058.28 at 7:27 a.m. ET, according to CoinDesk BPI. Prices rose by as much as 8.7% earlier in the day.
Prices settled at $1,938.94 on Sunday, the lowest in almost two months, amid concerns over the future of the cryptocurrency market.
Bitcoin rival ethereum crashed 20% Sunday morning to reach its lowest level since May 27. At last check, ether was valued at $174.36, up 9% from the previous close.
The value of the total supply of digital currencies has fallen below $70 billion, a stark contrast to the $115 billion valuation in June. Some analysts have described the latest drop as a technical correction, whereas others have cited underlying concern about the market following months of rapid appreciation. There has been no specific reason for the month-long correction in bitcoin and other digital currencies.
Still, market fundamentals suggest demand for crypto assets is on the rise, as investors look for alternative assets to store value and hedge against instability. The prospect of a globally decentralized exchange is also attracting new investors concerned about the shortcomings of central banking.
Andreas Antonopolous, an expert on digital currencies, attributed the large drop to a pullback after a “rapid 1,500% rise in two years, especially the last three months,” according to a Sunday morning tweet.
BTC/USD (CoinDesk BPI)