Neil DennisAfter losing in nine out the previous ten trading days, bitcoin put together a sizeable rally on Monday, and leading most of its cryptocurrency rivals higher.
Fears of US capital gains tax rises, technical trading patterns and may other reasons have been cited for bitcoin's recent retreat in which it fell from a peak of nearly $65,000 (£47,000, €54,000) to Sunday's six-week low of $47,098 (£34,000, €39,000).
Last week, in its monthly survey of fund managers, Bank of America/Merrill Lynch recorded three-quarters of asset managers now believe bitcoin is in a bubble.
Meanwhile, last Thursday the price fell below the 50-day moving average that it had traded above since late 2020.
Lacking bullish sentiment
On Monday, bitcoin rose 5.2% to $52,673, but many analysts were finding it difficult to why, with few signs of any kind of bullish reversal of recent sentiment.
Sara Tran, analyst at FXStreet, said: "While Bitcoin has recovered slightly since the deep plunge below $50,000, the market sentiment has shifted over the last week of price action."
She cited the Crypto Fear & Greed Index, which currently shows a level of "fear" not seen for several months. Calculated daily, the index measured 27 on Monday, down from 31 on Sunday, and down from a peak of 95 in mid-February.
The index measures several metrics, including price volatility, trading volume and certain trends such as sentiment on social media.
Tran concluded: "The current levels of fear around 27 points have not been seen since a year ago when Bitcoin price action was affected by the ongoing coronavirus pandemic crisis. The low level shown by the metric indicates that investors are as worried about losing capital with Bitcoin as they were a year ago."
Cryptocurrency rivals rally
Nevertheless, the price rallied on Monday, taking most of the cryptoverse higher with it. Ethereum gained 9.3% to $2,437, while Binance coin gained 7.8% to $538.65 and XRP added 9% to $1.16.
The only one in the top ten cryptocurrencies by market cap not to make significant gains on Monday was dogecoin.
The meme-based cryptocurrency has fallen 42% since hitting its record high of $0.45 on 16 April. Despite social media attempts to garner support for dogecoin - including naming 20 April as "Doge day" and setting a target of $0.69 - the asset continued to drop.
Dogecoin recovered some ground from its Friday low of $0.166 to stand at $0.26 on Monday.
