The price of Bitcoin (BTC) has regained its key support level of $55,000 U.S. after enduring a steep selloff alongside global equities.
Bitcoin, the largest cryptocurrency by market capitalization, has risen 4% in the last 24 hours to trade at $55,200 U.S. per digital token.
On Aug. 5, Bitcoin’s price plunged 11% and was briefly below $50,000 U.S. and at its lowest level in nearly six months amid heavy selling of risk assets.
However, Bitcoin now appears to be recovering and has regained the key support level of $55,000 U.S. that has served as the bottom of its trading range for most of this year.
Bitcoin’s recovery comes as other cryptocurrencies also rebound after a sharp selloff in recent days.
Ethereum (ETH), the second largest cryptocurrency by market capitalization, is up 3% and trading at $2,465 U.S. per token.
Smaller cryptocurrencies such as Solana (SOL), Cardano (ADA), and XRP (XRP) are each up between 3% and 5% after seeing steep declines on Aug. 2 and Aug. 5.
The selloff in cryptocurrencies was prompted by a plunge in equity markets caused by rising fears that the U.S. economy might be headed for a recession.
The blue-chip Dow Jones Industrial Average fell more than 1,000 points in a day and the tech-heavy Nasdaq index is now in a correction defined as a 10% decline from recent highs.
Analysts had been worried that Bitcoin’s price broke below $55,000 U.S. on Aug. 5, a sign of potentially more downside risk for the cryptocurrency.
However, analysts and investors are now cheering after Bitcoin quickly recovered the key support level.
Despite the current volatility, Bitcoin’s price is up 25% this year and has gained 90% in the last 12 months.
