Bitcoin is headed for the biggest gain since April, providing some welcome relief to battered cryptocurrency investors — but it may be too soon to call a bottom.
That’s the assessment of Kenetic Capital’s Jehan Chu after the largest digital token rallied on Wednesday, climbing as much as 15 per cent to US$4,339. It closed at US$6,302 in October. Gains in Ether, Litecoin, Zcash and XRP helped propel the Bloomberg Galaxy Crypto Index to a 16 per cent increase, paring this month’s rout to 30 per cent.
“What we are seeing is not yet a bottom but a short-term buying opportunity,” said Chu, managing partner at Kenetic Capital, a blockchain investment and advisory company. “Until we have broader adoption of decentralized applications, it will be hard to find a firm floor.”
One technical indicator had suggested Bitcoin was due a short-term bounce. The cryptocurrency’s relative strength index dropped to a record this month, according to Bitstamp prices that incorporate weekend trading, signalling it may have fallen too fast.
–With assistance from Matt Turner, Nancy Moran and Eddie van der Walt.