Bitcoin Climbs Over $19.5K Amid Wider Rally in Riskier Assets
Bitcoin rose for the second consecutive day and was recently trading just over $19,500, a nearly 2% gain over the past 24 hours and stark contrast from last week’s late roller coaster ride.
The largest cryptocurrency by market capitalization tracked U.S. equity indexes, which also climbed with the tech-focused Nasdaq and S&P 500 recently up 3.5%, and 2.7%, respectively, as investors awaited the latest third-quarter earnings reports and housing data that seems likely to reflect a continued cooling of the real estate market. On Monday, Bank of America became the latest financial services giant to report sagging results, joining Citigroup and Morgan Stanley, among others.
“The gains [of bitcoin] today mirror those in equity markets, with risk assets more broadly getting the week off to a good start,” Craig Erlam, senior market analyst at foreign exchange market maker OANDA, wrote in a Monday note.
Monday’s crypto gains also dovetailed with U.K. stocks, which jumped after the country’s treasury chief scrapped hotly criticized tax cut plans that had unsettled investors.
The overall market improvement also resulted from a recent U.S. dollar index (DXY) correction, Joe DiPasquale, CEO of crypto asset manager BitBull Capital, said.
The DXY index that measures the value of the U.S. dollar against other foreign currencies recently sank 1.1%, reversing a recent trend, according to MarketWatch’s data.
“Cryptocurrency prices have been positively correlated to the equity markets, so we would expect an oversold bounce in the equity market to benefit cryptocurrencies broadly,” said Will Tamplin, senior analyst at technical research firm Fairlead Strategies.
DiPasquale, however, was cautious about a long-lasting markets' rebound amid current macroeconomic uncertainty.
“Any sustainable reversal is unlikely to materialize in current conditions,” he said.