Bitcoin extends recovery as bulls aim for $55,000

Bitcoin edged higher for a third day following this weekend's flash crash, with chart watchers suggesting the rally may push the largest cryptocurrency back to around $55,000.

The coin rose as much as 2.9% to $51,590 on Tuesday, while other smaller tokens also advanced. Bitcoin had dropped as much as 21% on Saturday. The Bloomberg Galaxy Crypto Index of the biggest digital assets gained 5.1% at one point during the session and a gauge of 100 coins added 5.4%.

"Bottom line is the most leveraged and speculative marketplace in the world -- cryptos -- flushed out some of the excesses in thin weekend trading and is resuming the more enduring bullish trend," said Mike McGlone, a Bloomberg Intelligence analyst. The market has seen speculative traders "getting stopped out, and is attracting the more enduring buy and hold types."


Bitcoin and other cryptocurrencies dove this weekend amid a greater risk-off sentiment that also encompassed selloffs in many areas of the U.S. stock market. It happened as spiking inflation is forcing central banks to tighten monetary policy, threatening to reduce the liquidity tailwind that lifted a wide range of assets.