Bitcoin (BTC) price climbs back above $30,000

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A bitcoin sign with a graph pictured in the background.

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Bitcoin and other cryptocurrencies recovered Wednesday after a brutal sell-off, with the world’s biggest digital coin climbing back above $30,000.

The price of bitcoin rose 6.2% in the last 24 hours, to $31,676 at 10:40 a.m. ET, according to Coin Metrics data. Smaller cryptocurrencies ether and XRP also rebounded, up around 9% and 6% respectively.

The crypto market saw significant selling on Tuesday, with bitcoin falling below the $30,000 mark for the first time since June 22.

The plunge came on the back of news that the New Jersey attorney general issued a cease-and-desist letter to crypto lending firm BlockFi, ordering it to stop offering interest-bearing accounts.

The reason for the move higher Wednesday wasn’t immediately clear. Cryptocurrencies often undergo severe price swings. Bitcoin, for example, rallied to an all-time high of almost $65,000 in April before halving in value in the months that followed.

‘Dead cat bounce’

Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno, said Wednesday’s price move was likely a “dead cat bounce,” where an asset briefly recovers from a prolonged decline before continuing to slide.

Unless bitcoin can climb above $32,000-$33,000, Ayyar expects more downside, with the top cryptocurrency potentially tumbling as low as $24,000-$25,000.

“We saw broad market rallies across the board last night as well, and I think crypto is just playing off of that,” Ayyar told CNBC.

“In general, there are lot of macro factors weighing down on risk-on assets at the moment — inflation worries, Covid, and with crypto we’ve got more specific worries such as much more regulatory oversight.”

Regulatory pressure

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