- Bitcoin is up 22% in the past week, trading at $21,236 on Tuesday.
- The cryptocurrency hasn’t touched that level since before FTX’s bankruptcy in November.
- A blockchain exec says that markets could see more volatility if large institutional players sell bitcoin.
Bitcoin has been on multi-day rally following strong Consumer Price Index data, surging 22% in the past week to touch levels not seen since prior to the fall of cryptocurrency exchange FTX in November.
The token is ahead 1.96% at $21,236 on Tuesday.
Bitcoin is trading at levels not seen since the fallout from the collapse of Sam Bankman-Fried’s exchange. The industry’s total market capitalization notched $1 trillion again over the weekend amid signs of bottoming.
Elsewhere, altcoins are trending upwards as well. Solana spiked 44% in the past month following the release of a solana-based meme token called Bonk Inu. Polygon’s token surged 19% in the past week on news of an upcoming software upgrade.
Markets still have a long road to recovery amid a lengthy crypto bear market. Decades-high inflation, along with a slew of bankruptcy filings from the industry’s biggest players like FTX, Celsius, and Three Arrows Capital last year have continued to hit investor sentiment as well.
Despite recent gains, bitcoin is still down 68% since its all-time high in November of 2021. Industry executives, however, seem optimistic that market jitters will subside.
“I think we’ll see less volatility in the Bitcoin price over the next 6 months just because traders are likely scarred by the recent events of the FTX crash,” Kadan Stadelmann, Chief Technology Officer of blockchain solutions provider Komodo, told Insider earlier this year.
Stadelmann added: “FTX held [zero] BTC, so we shouldn’t see any liquidation events directly from that. However, large institutions that had a portion of their funds on FTX might be forced to sell their assets held in other places, which might include BTC.”
Danny Chong, cofounder of tokenized asset management protocol Tranchess, says that markets could worsen if there is more stringent crypto regulation or macroeconomic conditions become less favorable for investors.
“This could be a further blow to the already lowered confidence levels in the industry,” Chong told Insider earlier this year. “Coupled with bearish global market conditions like the persistence of high inflation, if such challenges are faced this year within the industry, this could have a negative impact on the crypto market.”
Last week, CPI data for December signaled that inflation pressures eased again, giving Federal Reserve officials leeway to slowdown interest rate hikes.