Bitcoin rose 8.2% in the past 24 hours to $55,690.4 by 02:15 ET (06:15 GMT). The token had slumped as low as $49,000 before recovering some ground.
Broader crypto prices also recovered some of Monday’s slump, tracking a rebound in equity markets. But sentiment towards risk-driven assets still remained largely fragile.
While the world’s biggest cryptocurrency did recover some of its recent losses, a bigger recovery remained doubtful amid persistent concerns over a U.S. recession and an extended rout in equity markets.
Crypto markets were especially vulnerable to the risk-off rout, given their highly speculative nature. Sentiment towards Bitcoin was already strained by reports showing the U.S. government mobilized at least $2 billion of tokens for a potential sale.
Uncertainty over the regulatory outlook for crypto, as the 2024 presidential election drew near, also kept traders skittish towards cryptocurrencies.
Crypto investment products saw outflows of around $528 million in the past week, data from digital assets manager Coinshares showed on Monday.
Bitcoin and Ether accounted for most of the outflows, which appeared to be spurred by a broad decline in sentiment. Short-Bitcoin instruments were among the few products to see inflows, especially after the reports of the government mobilization last week.
Trading volumes in crypto investment products also remained well below yearly averages, with the recent launch of spot Ether exchange-traded funds sparking little optimism.
Broader crypto markets tracked a recovery in Bitcoin, recouping some of their steep losses but still remaining well below levels seen last week.
World no. 2 token Ether rose 11.7% to $2,522.25, while ADA, SOL and XRP rose between 10% and 22%.
Among meme tokens, DOGE surged 15.9%.
Crypto prices rose tracking gains in U.S. stock index futures and Asian markets, as equities appeared to be somewhat stabilizing after a bruising rout on Monday.
The prospect of U.S. interest rate cuts also helped sentiment, as markets bet on a bigger reduction in September on worsening economic conditions.
But crypto’s recovery still remained relatively fragile, with sector’s speculative nature keeping the risk of another potential selldown in play.
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