Bitcoin moved back above $11,000 versus the US dollar on Thursday, while rival digital currency ethereum climbed back above $1,000 as exchanges reported strong demand at recent lows.
The controversial cryptocurrency, having made a stellar rally in 2017, reached a peak close to $20,000 in December, before losing half its value in the subsequent month.
Buying demand at $10,000
In the past few trading sessions, however, it appears bitcoin and many of its crypto rivals have found strong buying demand from speculators at current levels.
Omkar Godbole at CoinDesk reported on Thursday: "Persistent demand around the $10,000 mark appears to have not only neutralised the immediate bearish outlook on bitcoin, but also hints the cryptocurrency could be building a base for an eventual move higher."
Indeed, the four dips below the $10,000 level this month have resulted in speedy rallies that lifted bitcoin immediately back above the technical level. Significantly, bitcoin has not closed below $10,000 in 2018.
"Prices on CoinDesk's Bitcoin Price Index (BPI) fell to $9,972.29 on Tuesday, before witnessing a quick recovery to $11,000 levels," said Godbole.
"This is the fourth time in last week that bitcoin has recovered losses after sinking below $10,000 levels."
Much of the negative sentiment in January has come from news of regulatory crackdowns in countries such as South Korea, China and France.
Lukman Otunuga at FXTM said: "There is anxiety in the air over South Korea banning anonymous cryptocurrency trading, while China’s cryptocurrency crackdown has impacted appetite for bitcoin.
"Taking a look at the technical standpoint, bitcoin remains in a bearish trend on the daily charts. Sustained weakness below $11,000 could invite a decline towards $10,000. Alternatively, a break above $12,000 could trigger a further incline towards the $13,000 lower high."
By mid-morning trade in London, the main cryptocurrencies stood higher.
- Bitcoin was up 4.07% at $11,226
- Ethereum climbed 6.07% to $1,047.40
- Ripple moved 1.59% lower to $1.327
- Litecoin edged 0.9% higher to $179.37