Bitcoin (BTC-USD) rallied back above $30,000 (£22,057) on Wednesday morning, recovering from a price dip that saw the world's biggest cryptocurrency fall below the key support level.
Bitcoin was up 3.6% to trade at $30,853 shortly after 8am in London on Wednesday. The cryptocurrency had fallen below the closely-watched $30,000 level on Tuesday, dropping as low as $29,393 and ending the day below $30,000 for the first time since January.
"Everyone has been looking at this support number religiously, and the fear in the market was that if bitcoin breaks below the 30K mark, the price will move lower violently," said Naeem Aslam, chief market analyst at Avatrade. "But in reality, that is not what we have seen, the bitcoin price has been stable, and we have not seen any panic selling."
Mati Greenspan, founder and chief executive of Quantum Economics, said: "Suffice it to say, this could have been a lot worse.
"The fact that it broke below such a large psychological level after weeks of testing and didn't immediately continue downward is actually a very bullish signal."
The wider cryptocurrency market had sold off in tandem with bitcoin on Tuesday but was broadly higher on Wednesday morning. The value of the market was up more than 4% over the last 24 hours, according to data provider CoinMarketCap.
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Despite Wednesday's recovery, bitcoin still remains far from its all-time peak of more than $64,000 reached in April. The cryptocurrency slumped from its highs in early May and has been trading in a tight range between $30,000 and $35,000 since then. Bitcoin is still on track to record its fourth straight month of losses in July.
The decline has coincided with rising regulatory scrutiny around the world. Watchdogs have been cracking down on bitcoin miners in China and key infrastructure providers like Binance and BlockFi around the world. On Tuesday, the EU proposed new rules requiring people to record who is involved in cryptocurrency transactions in a bid to make the market more transparent and traceable.
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