Bitcoin rally pauses near US$57,000 as traders await new catalysts

[NEW YORK] A rally in Bitcoin paused around the US$57,000 level Tuesday amid ongoing speculation that the largest cryptocurrency could retest the record highs reached earlier this year.

The digital currency fell about 1 per cent to US$56,700 as of 11.05 am in Hong Kong, while the wider Bloomberg Galaxy Crypto Index edged lower. Bitcoin is up 90 per cent from a July low and in sight of its mid-April record of almost US$65,000.

As in past rallies, many reasons have been cited for the latest surge. They include easing concerns about regulatory efforts in the US and China and signs of a rebound in the computing power devoted to mining Bitcoin. Optimism is also growing about possible US Securities and Exchange Commission approval of a Bitcoin exchange-traded fund.

"Bitcoin will likely need a fresh catalyst to make US$60,000 happen, but if that happens quickly, record highs might not be hard to reach," Edward Moya, senior market analyst at Oanda, wrote in a note.

Bitcoin's relative strength index is about 70, suggesting it's flirting with overbought territory. At the same time, the digital coin is prone to volatile swings that can trample over the best efforts to gauge its outlook.

Separately, JPMorgan Chase & Co chief executive officer Jamie Dimon said that cryptocurrencies are going to be regulated as anxiety around stablecoins and the asset class more broadly has grown in Washington.

"Blockchain can be real, stablecoins can be real," Dimon said at the Institute of International Finance annual membership meeting, held virtually again this year. "No matter what anyone in the room thinks, nor what any libertarian thinks, nor what anyone thinks about it, government's going to regulate it."

BLOOMBERG