A lull in Bitcoin’s wild swings in recent days has been taken by some as a tentative sign the fragile digital currency could recover.
The world’s largest cryptocurrency was little changed at $36,425 as of 6:45 a.m. in New York on Tuesday, following two straight sessions of gains.
Swings in the price — as measured by the spread between its daily high and low — have fallen to their lowest since the beginning of the year, despite reports over the weekend that U.S. financial authorities are preparing to take a more active role in regulating the crypto market. Bitcoin’s 10-day volatility fell back to 106% from a high of nearly 162% on May 24.
“Despite another set of ‘negative headlines’ Bitcoin actually rose $2,000 over the weekend,” wrote Tom Lee, co-founder of independent research firm Fundstrat Global Advisors LLC in a note to clients. “I can’t help but view this as reinforcing the likelihood Bitcoin has bottomed, given bad news is not creating new lows.”
Lee sees Bitcoin exceeding $125,000 before the end of the year, but is watching for a rise above $40,000 as a sign the digital currency has seen its lows for 2021.