Bitcoin bounce drives upward correction: El-Erian a buyer at $5,000

July 02, 2018
Chris Wheal

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.

Bitcoin price bounced over the weekend: Shutterstock

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.

Mohamed El-Erian: Wikimedia Commons

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

 

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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