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Ethereum, dogecoin surge as cryptos continue volatile recovery

Representations of the virtual currency Ethereum stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration
Ethereum — the world's second most popular crypto — soared more than 10% on Tuesday morning. Photo: Reuters (Dado Ruvic / reuters)

Cryptocurrencies were broadly higher on Tuesday morning as they continue a volatile recovery after a major sell-off the weekend before last.

Bitcoin (BTC-USD) was up 3.6%, trading at $36,878 (£25,915). It once again fell below $40,000, although last week it did manage to crawl past the mark. It remains far from its all-time high of $63,000.

Ethereum (ETH-USD) — the world's second most popular crypto — soared more than 10%, to trade at $2,655, while dogecoin (DOGE-USD) gained 8.6% to $0.33.

“It seems like everything is very much hanging in a holding pattern,” said Naeem Aslam, chief market analyst at Ava Trade.

But he said “the upward momentum still looks like it lacks any major backing, and a threat for a further downward shift in the bitcoin price is still certainly on the table.”

“Basically, as long as the bitcoin price doesn’t cross above the 40K and break another resistance which is at 50K, it is unlikely we may see a beginning of another major bull rally” he added.

Kaia Parv, head of Investment Research at trading platform Fxprimus, told Yahoo Finance UK that "bitcoin and correlated crypto assets may have found their bottom as there seems to be bullish price action this morning. Having said that, technical indicators are still deeply bearish for the upcoming trading sessions."

Over the weekend crypto portfolio management app Blockfolio asked Tesla CEO Elon Musk to create a hot tub heated by dogecoin, to which the crypto supporter replied: "great idea."

Musk has been a dogecoin supporter for a while now, tweeting about it regularly. Almost every time this sends the price of the joke token higher and this time was no different.

Meanwhile, bitcoin has been dampened by many things recently, including a crackdown in China and Iran. Last week, Bank of Japan governor criticised digital currencies for speculation.

Watch: What are the risks of investing in cryptocurrency?

"Most of the trading is speculative and volatility is extraordinarily high,” Haruhiko Kuroda had said.

And the country's regulator has also issued a warning to crypto derivatives exchange Bybit for allowing residents of Japan access to the exchange without registering with the country's regulator.

"Cryptocurrencies were the biggest losers in May... seeing a massive slump as authorities struck a distinctly negative tone towards them in multiple countries," noted a Deutsche Bank (DBK.DE) note.

Read more: European markets open higher amid third wave fears

But cryptos are continuing to get mainstream acceptance.

Financial advisory organisation deVere Group said it will offer its clients a fixed-yield bond that tracks futures of bitcoin and ethereum on the Chicago Mercantile Exchange over a one-year maturity period.

The decision "was made to cater to the soaring client demand regarding cryptocurrencies," the company said.

WisdomTree, an exchange traded fund and exchange traded product (ETP) sponsor, announced its physically-backed bitcoin and ether ETPs have listed on Euronext (ENX.PA) exchanges in Paris and Amsterdam.

“Listing on Euronext opens up more access points for investors to conveniently allocate to, and trade, both WisdomTree Bitcoin (BTCW) and WisdomTree Ethereum... This milestone represents the growing acceptance of cryptocurrencies, the evolving European regulatory landscape and the latest signal that digital assets are here to stay," said Jason Guthrie, head of digital assets, Europe, WisdomTree.

"A willingness from regulators and exchanges to list cryptocurrency ETPs is lending further credibility to this growing and popular asset class. This development will buoy institutional investors, trading via Euronext, that have been waiting for further signs of acceptance before making their first allocations to digital assets.”

Watch: What is bitcoin?