Bitcoin (BTC-USD) has mimicked the latest stock market rally with a sudden price recovery, up 3.3% in the last 24 hours to $ 31,607 on Tuesday.
Bitcoin’s price has risen by 8.4% in the past week and its market capitalization has moved back above the $ 600bn (£ 476bn).
The crypto market was up 4% on Tuesday, suggesting a tendency to follow tech stocks. The Nasdaq (^ IXIC) was at 12,681 points, up by 3.3%.
“Bitcoin surged by 8% yesterday to edge over the $ 32,000 level for the first time in nearly three weeks,” analysts from WazirX Trade Desk told the Financial Express.
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“With the Dollar index falling to 101 and the overall stock markets rallying, bitcoin and the crypto markets also saw a bullish run.
“On the daily time-frame, the BTC trend continues to traverse within a descending triangle pattern. The next resistance for BTC is expected at $ 40,000.”
Investor sentiment has been encouraged by a fresh stimulus in China after the easing of disruptive lockdown measures in Shanghai and Beijing.
But the rally comes amid hawkish rate hike comments from Christopher Waller, the governor of the US Federal Reserve.
On Monday, Waller said the Fed should be prepared to raise interest rates by half a percentage point at every meeting from now on until inflation is decisively curbed.
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During a speech to the Institute for Monetary and Financial Stability in Frankfurt, he said: “I am advocating 50 basis point hikes on the table every meeting until we see substantial reductions in inflation.
“Until we get that, I don’t see the point of stopping.”
The bitcoin rally has taken most of the cryptocurrency market into the green.
Ethereum (ETH-USD) rallied to touch the psychological $ 2,000 mark, up nearly 4% on Tuesday.
The world’s second largest cryptocurrency saw its average network fee drop to a 10-month low of $ 2.96 per transaction.
Another positive sign from ethereum came with the recent announcement from founder Vitalik Buterin that the long-awaited “merge” to a less energy intensive proof of stake consensus mechanism will take place this August.
A consensus mechanism describes the blockchain technology that allows cryptocurrency transactions to be validated in a way that cannot be tampered with.
The biggest winner of the latest crypto price recovery has been cardano (ADA-USD), up 28% in the last week. Most of this movement happened in the last 24 hours, gaining 27.8% to $ 0.66.
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The cryptocurrency market was also buoyed by the latest strategy note from JP Morgan Chase (JPM).
The global investment bank sees a “significant upside” to the price of bitcoin, expecting a 28% rise.
It has also replaced real estate with cryptocurrencies as its “preferred alternative asset class along with hedge funds.”