Cryptocurrencies bounce back from a market meltdown, but bitcoin is still headed for its longest streak of weekly losses ever

Bitcoin climbed back above $30,000 Friday as investors’ appetite for risk assets returned, with cryptocurrencies across the board staging a recovery from a market rout.

Bitcoin, the biggest cryptocurrency by market value, climbed 9.3% on the day to reach $30,335 as of 6:20 a.m. ET, according to CoinMarketCap data. It plunged to its lowest level since late 2020 on Thursday, briefly dipping below $26,000.

Second-biggest crypto ether rose about 9% to trade at $2,065, having declined by more than 20% in the past week. Among other major tokens, cardano and solana shot up 28% and 20% respectively. Meanwhile, meme coin dogecoin was up 18%.

While bitcoin had upward momentum Friday, it remains below the $45,000 levels it traded at in February, before the Ukraine war, and well below the record high of $69,000 hit in November.

It is also still on track for a weekly loss, which would be its seventh in a row — the longest stretch of weekly losses in its history. Before this year, the token had not logged consecutive weekly losses.

“Some traders may see the sharp fall this month as an opportunity to buy the dip at a time but, given the hugely volatile nature of the coins, the crypto house of cards could tumble further,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.

She added: “This latest plunge in the wheel of fortune demonstrates that speculating in cryptocurrencies is extremely high risk and are not suitable for investors who don’t have money they can afford to lose.”

This week’s savage sell-off in the crypto market came after a dramatic collapse in a large stablecoin, combined with investor flight from high-risk assets.

TerraUSD cratered after losing its peg to the dollar, and was last trading at around $0.15. Its sister coin luna has plunged effectively 100% to zero as of Friday, from over $80 a token a week ago.

Along with stocks and bonds, the crypto market has deteriorated in recent weeks as soaring inflation has nudged the Federal Reserve to reel in the ultra-easy monetary policy it implemented to protect a pandemic-stricken economy.

On Thursday, Fed Chair Jerome Powell lifted some spirits by playing down the chances of a bigger-than-normal interest-rate hike of 75 basis points in comments to Marketplace.

In the last week alone, the crypto market as a whole has lost over $500 billion in value, according to CoinMarketCap.

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