Positive Investor Comments and News of Potential Use by Amazon and Twitter Fuel a Cryptocurrency Surge
Introduction: Cryptocurrencies have surged to the top of their recent ranges after a robust week of gains, with traders optimistic that positive comments from influential investors could signify a reversal in fragile sentiment.
The Surge: Bitcoin rose 12.5 percent on Monday to reach $39,850, its highest level since mid-June. Ether, on the other hand, rose to a three-week high of $2,344. The strong gains come on the back of Bitcoin’s best week in almost three months, putting pressure on short-sellers.
Positive Comments from Investors: Tesla’s CEO and cryptocurrency enthusiast, Elon Musk, stated last week that the carmaker would likely resume accepting Bitcoin payments once it conducts due diligence on its energy use. It had suspended such payments in May, contributing to a sharp crypto selloff. Twitter’s CEO, Jack Dorsey, also said that the digital currency is a “big part” of the social media firm’s future. Additionally, last week, London’s City AM newspaper reported that Amazon is looking to accept Bitcoin payments by year-end, citing an unnamed “insider.” Amazon recently advertised a job vacancy for a digital currency product lead, prompting speculation that it might accept digital coins for transactions.
Market Sentiment: The comments from influential investors and news of potential use by Amazon and Twitter have provided a much-needed boost to the market, which has been struggling since the May selloff. Brokers noted that these remarks, combined with heavy short-seller liquidations, may have contributed to lifting the market from its support floor.
Conclusion: Overall, the market’s outlook and momentum for the week ahead are positive, with general near-term bullishness driven by key technicals and recent positive comments. Despite Bitcoin still remaining some $27,000 off its mid-April high of almost $65,000, the surge in cryptocurrencies is an indication of its resilience amidst criticisms of energy consumption, regulatory crackdowns in China, and harsher official scrutiny in Europe and the US.