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Bitcoin Rallies as China’s Covid Easing Adds to Risk-On Mood

The largest cryptocurrency advanced as much as 6% to $30,894 on Monday and traded at $30,390 at 2:47 p.m. in London. Ether and smaller tokens like Avalanche, which got pummeled last week even as Bitcoin held relatively steady, were also up

The largest cryptocurrency advanced as much as 6% to $30,894 on Monday, May 30.
By Joanna Ossinger
May 30, 2022 | 10:00 am

Bloomberg — Bitcoin (BTC) posted its biggest gain in two weeks as China’s easing of Covid curbs stoked investor enthusiasm for riskier assets.

The largest cryptocurrency advanced as much as 6% to $30,894 on Monday and traded at $30,390 at 2:47 p.m. in London. Ether (XTC) and smaller tokens like Avalanche, which got pummeled last week even as Bitcoin held relatively steady, were also up. Stocks rose in Asia and Europe after the S&P 500 rallied on Friday.

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“Markets are long overdue for a relief rally,” said Hayden Hughes, chief executive of social media trading platform Alpha Impact. “Bitcoin just went through eight consecutive weeks in red territory and got technically oversold to levels we traditionally only see at the bottom of bear markets.”

Bitcoin has broken back above $30,000 after languishing for some daysdfd

Cryptocurrencies re-established their tendency to trade in tandem with equities after falling on Friday even as the S&P 500 capped a weekly advance of 6.6%. Friday’s divergence sparked concerns that investors would continue dumping digital tokens even amid a revival in demand for other risk assets.

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Inflation reports from Spain on Germany on Monday underscored that the macroeconomic forces that have weighed on crypto in the past months aren’t about to ease. Consumer prices in both countries jumped faster than expected in May, adding pressure on the European Central Bank to remove crisis-era stimulus. Rising interest rates around the world have triggered a selloff in risk assets this year, sending Bitcoin down 34% since Dec. 31.

Ether jumped as much as 6.6% on Monday while Avalanche and Solana rose 9% and 6%, respectively, before giving up some of those gains. Luna, the new token distributed to investors who saw the value of their cryptocurrencies tied to the Terra blockchain wiped out earlier this month, advanced 13%, according to CoinGecko.

“On Alpha Impact, we’re seeing heavy buying of Ether and several altcoins, and these patterns mirror what we saw in the July 2021 bear market bottom and the January 2022 local bottom,” Hughes said.