Bitcoin bounces off 2-year low with 5% rally even as traders remain cautious after FTX collapse

Bitcoin jumped higher connected Wednesday bouncing disconnected the erstwhile day's two-year low, adjacent arsenic traders stay cautious implicit the imaginable contagion from the illness of cryptocurrency speech FTX.

The world's largest integer currency roseate much than 5% to commercialized astatine $16,497.19 astatine astir 3:34 a.m. ET.

"We're bouncing disconnected a enactment level, which is rather expected, since we've been rather oversold implicit the past week oregon two," Vijay Ayyar, vice president of firm improvement and planetary astatine crypto speech Luno, told CNBC.

"However, this determination doesn't bespeak immoderate bullishness yet ... We could beryllium seeing a bearish bounce here, looking astatine absorption astir $17K, earlier further downside targeting $14K," helium added.

Markets stay connected borderline aft the fall of FTX, a erstwhile $32 cardinal empire which was 1 of the world's largest cryptocurrency exchanges.

Investors are disquieted that determination could beryllium contagion from the FTX fallout and are looking for signs of different companies oregon entities that whitethorn person had vulnerability to the exchange, which was founded by Sam Bankman-Fried.

"In general, markets person been tense post-FTX, expecting further contagion from parties related to FTX," Ayyar said.

FTX could person much than 1 cardinal creditors. The institution owes $3.1 cardinal to its 50 largest unsecured creditors alone. However, FTX's assorted entities crossed the satellite lone had astir $1.24 cardinal successful currency balances arsenic of Nov. 20, according to a court filing published this week.

Bankman-Fried, who resigned arsenic FTX CEO earlier this month, has been trying to broker a deal from his location successful the Bahamas to bail retired the exchange, a determination that appears highly unlikely.

Meanwhile Justin Sun, a high-profile crypto entrepreneur, said Tuesday that helium and his associates were considering whether to bargain immoderate of the assets from FTX.

Cryptocurrency ether besides bounced connected Wednesday, trading up much than 7% astatine $1,161.89 astatine 3:42 a.m. ET.

Ether successful peculiar was nether unit aft hackers stole astir $477 cardinal successful cryptocurrency from FTX.

The hackers past converted a immense magnitude — astir $280 cardinal — into ether earlier dumping the holdings into different cryptocurrency arsenic they began to launder the money. That selling enactment unit connected ether.

It has been a pugnacious twelvemonth for crypto with the manufacture being plagued by collapses, liquidity issues and bankruptcies. More than $1.3 trillion of worth has been wiped disconnected the full cryptocurrency marketplace this year.