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Bitcoin (BTC)'s unusual bounce of more than 30% from its June lows is leading analysts to believe that the bear market that has hit the cryptocurrency in recent months may soon be over.
Signs of a further approach to $25,000 are due to BTC prices hitting the so-called upper Bollinger band, Bloomberg says. This occurs after a period when volatility has been compressed, which is often interpreted as a "precursor to a sustained directional move," the publication said.
Something similar happened in June, when a period of low volatility was observed, which subsequently caused Bitcoin to fall, right after the bottom band was marked. On Friday, July 22, BTC bounced back after the previous day's decline.
Resisting Tesla’s Sell-Off
Thursday's drop in the cryptocurrency came after Tesla announced a sell-off in Bitcoin. Elon Musk's car company has sold 75% of its cryptocurrency holdings.
Despite the losses, Bitcoin was able to resist and recover by crossing the $23,000 mark. However, she still fell short of the $24,200 maximum she earned for the week.
Musk’s Clarification on the Sale of BTC
Regarding Tesla's move to sell 75% of its bitcoins, Elon Musk clarified during the company's earnings conference call that the sale “should not be considered a bitcoin verdict.
He explained that the real reason was uncertainty about how long the COVID-19 lockdowns in China would last, raising concerns about the company's production. "It was important for us to maximize our cash position," Musk said.
"We are certainly open to increasing our bitcoins in the future," the Tesla CEO added. He also noted that the company did not sell its stake in Dogecoin, the popular dog cryptocurrency.
At 10:35 a.m. (GMT-4), bitcoin was trading at $23,504, according to Coindesk, a gain of 5.04% on the day.