Cryptocurrencies struggle to maintain last week's rally

Can crypto bulls emerge from hiding yet?

Hopes that the cryptocurrency selloff had run its course were rudely dashed last week in an avalanche of selling that culminated in bitcoin coming within a whisker of $60,000, a level not seen since before the US election. Previous crypto selloffs have needed such a ‘flush’ to provide the necessary reset to sentiment, and given some of the press comments over the last week we may be at a point where sentiment has hit washout levels, even if the losses in percentage terms are not yet as bad as the 2022 slump.

South Korea to boost regulation

“Bithumb's accidental distribution of $40 billion worth of bitcoin is the sort of incident that gives ammunition to regulators pushing for tighter oversight. While authorities managed to retrieve most of the coins, the reputational impact will take longer to undo. The episode highlights ongoing operational risks in digital asset infrastructure, something South Korean officials are keen to address through expanded regulation. Whether tougher rules would have prevented this particular error is debatable, but the case for more oversight has certainly been strengthened.

What we’re watching – Cryptocurrency recovery still uncertain

While cryptocurrency prices have managed to bounce from last week’s lows, there still seems no rush to pick up coins on the cheap. Gold’s recovery back above $5000 threatens to stymie any crypto rebound before it even gets going. The world’s focus is back on old-fashioned things like oil and gold, while the wave of the future commentary centres around AI and not cryptocurrencies. Ultimately though cryptocurrencies need bullish momentum, and despite the recovery last week that is still lacking.