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Bitcoin bounces off six month lows as buyers step in

Stock MarketsJan 24, 2022 04:35PM ET
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© Reuters. FILE PHOTO: Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris July 11, 2014. REUTERS/Benoit Tessier

By Karen Brettell and Tom Wilson

NEW YORK/LONDON (Reuters) - Bitcoin gained on the day on Monday as buyers stepped in to buy the cryptocurrency, after earlier tumbling to its lowest level in six months on fears of a Russian attack on Ukraine and before this week's Federal Reserve meeting.

The largest cryptocurrency was last up 2.5% at $37,250 after earlier dropping to $32,951, its lowest price since July 23. That took losses from its all-time high of $69,000 hit in November past 50%.

Bitcoin is now at a critical juncture where analysts say that further selling could reverse its long-term bull trend.

The currency fell earlier on Monday on rising tensions between Russia and Ukraine. NATO said it was putting forces on standby and reinforcing Eastern Europe with more ships and fighter jets, in what Russia denounced as an escalation of tensions over Ukraine.

Nerves over the Federal Reserve's two-day policy meeting, starting on Tuesday, added to the mix, with the U.S. central bank expected to confirm it will soon start draining the pool of liquidity that has supercharged growth stocks.

"The story is really how aggressive is the tightening," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noting that a Fed move to reduce the size of its balance sheet will tighten conditions along with higher interest rates.

Cryptocurrencies fell along with other risk assets as "people are pulling back on risk broadly," he added. Stocks also bounced off their lows in afternoon trading. [.N]

Katie Stockton, founder of technical analysis firm Fairlead Strategies, said that closing this week above the $37,400 level, where there is support from the Ichimoku cloud bottom, may be key to whether the selloff is a correction in an uptrend, or the start of a bear trend.

If Bitcoin fails to rise back above this level, then “the long-term uptrend is essentially reversed by that breakdown,” she said.

Around $465 million in crypto assets have been liquidated in the past 24 hours, according to data from Coinglass, with Bitcoin trades accounting for $167 million of that total.

Smaller cryptocurrencies, which tend to move in tandem with bitcoin, also slumped but ended off their lows. Ether, the second-largest digital coin, was last down 3.5% at $2,451, after earlier reaching $2,160, its lowest level since July 27.

U.S.-listed cryptocurrency miners Riot Blockchain (NASDAQ:RIOT) and Bit Digital and Marathon Digital also rebounded from earlier lows while crypto exchange Coinbase (NASDAQ:COIN) Global pared most of the day's losses.

(Graphic: Bitcoin/gold, https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwjdoapo/btc.PNG)

Bitcoin bounces off six month lows as buyers step in
 

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Comments (5)
Google forced Bullshit
Google forced Bullshit Jan 25, 2022 2:57AM ET
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lol cause of Ukraine. distracting from the real problems blaming this on Ukraine.
Alan Rice
Alan Rice Jan 24, 2022 1:20PM ET
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should be downside support at 30.....(Cents).
Alex Chan
Alex Chan Jan 24, 2022 9:17AM ET
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Bitcoin is the new gold?
Alex Chan
Alex Chan Jan 24, 2022 9:17AM ET
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I think some crypto influencer named named wood told me that. or was it scarramuccme?
Tyrone Jackson
Tyrone Jackson Jan 24, 2022 8:27AM ET
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Haha- the markets are off the highs not because of Ukraine- Russia. It’s because of the energy crisis Biden created. And the 3 trillion pumped into the system. This is going to be EPIC to watch. Btw- bitcoin will go to 30k 20 k Watch and learn
jason xx
jason xx Jan 24, 2022 6:10AM ET
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What do you mean "start draining" they already started draining?
IceIce Baby
IceIceBaby Jan 24, 2022 6:10AM ET
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Bitcoin has been heading lower since the 10th of Nov, 2021 but the authors Tom Wilson and Medha Singh might have just recognized it. :))  Btw. it seems Ukraine is the new covid in financial terms, at least in the financial media.
jason xx
jason xx Jan 24, 2022 6:10AM ET
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I saw that
 
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