Bitcoin bounce drives upward correction: El-Erian a buyer at $5,000
The price of bitcoin enjoyed a well-received bounce over the weekend, having sunk last week to its lowest point since November – hitting a trough of $5,791 on Friday.
Recent price volatility in the cryptocurrency market has sparked much debate over the sector’s future as regulators begin to tighten their grip on what remains a largely unregulated landscape.
“It is currently looking like 2018 will test Bitcoin and other cryptocurrencies as regulators discuss it more and more frequently,” said a cryptoinvestor on Steemit.
El-Erian may buy bitcoin at $5,000
But more fundamentally, the debate on whether cryptocurrencies like bitcoin can ever represent a store of value was given added influence this weekend with input from influential investor Mohamed El-Erian.
Chief economic advisor at Allianz – the parent company of Pimco where he was formerly chief executive and chief investment officer – El-Erian told CNBC that bitcoin would eventually be treated as a store of value and that he would consider buying it if it dropped to $5,000.
While he was critical of the bandwagon effect that took bitcoin up close to $20,000 in December 2017, El-Erian said he believed bitcoin and other cryptocurrencies would have longevity and would find resistance levels.
“I don’t think you get all the way back to $20,000, but I do think that you need to establish a base whereby the people who really believe in the future of bitcoin consolidate and then that provides you a lift.”
Recent price action
Last month was largely a washout for crypto assets: bitcoin lost nearly 28% between 31 May and 29 June, while many of the smaller digital coins in the crypto top 10 lost more than 40% in the same period.
But then, late on Friday and during Saturday 30 June, the sector enjoyed an impressive corrective rally which took bitcoin from its seven-month low at around 5,818 to a nine-session high near 6,500 – a rally of 11.7%.
On Monday, bitcoin and its top 10 rivals were holding close to recent highs. Here’s a round-up of Monday’s price action (or inaction):
- Bitcoin eases 0.9% to $6,348
- Ethereum is 1.2% lower at $446.76
- Ripple edges 0.7% lower to $0.46
- Bitcoin cash dips 1.2% to $737.07
- Eos loses 1.2% to $7.97
- Litecoin slips 1% to $79.56
- Cardano rises 3% to $0.14
- Stellar lumens adds 2.1% to $0.20
- Iota climbs 1.6% to $1.05
- Tether unchanged at $1