Hong Kong:Bitcoin rose by 1.5% in early Asia on Tuesday, after firming overnight in line with equity markets and other risk assets, but many crypto traders remained on edge after Saturday's sharp and sudden plunge.
The world's largest criptocurrency was last around $50,800, having closed a choppy day on Monday 2.2% higher.
The general confidence incryptocurrencies is high and market sentiment is coming back as we saw a risk-on mood on Monday. Omicron's effect looks a lot milder than the market has digested, said Edison Pun, senior market analyst at Saxo Markets in Hong Kong.
On Saturday, a combination of profit-taking and macroeconomic concerns led to a drop in the price of cryptocurrencies to just over $42,000, but rebounded slightly later in the session, with thin weekend liquidity exacerbating price moves.
Analysts were not quite sure what caused the heavy selling of digital currency. They pointed to a plunge in margin borrowing and fresh futures positions, as well as activity by large holders ofbitcoin as evidence of mass liquidation.
The largest crash occurred on May 19 after a 31% collapse in the price of bitcoins. According to Coinglass, the market value of the digital currency has fallen to $932 billion from $1.25 trillion on October 21.
On November 10, the new record high for digital currency was $69,000.
The world's second largest criptocurrency, Ether, was down 0.3% to $4,340 at the end of the day.
Against its larger peer, ether sat at 0.085Bitcoin, just off Monday's near four year top.