Bitcoin tops $17,000 for the first time in two weeks but analysts don't expect the bounce to stick

Bitcoin connected Wednesday roseate to a two-week precocious arsenic investors proceed to measurement up the fallout from the illness of cryptocurrency speech FTX.

But 1 expert warned that the bounce is apt conscionable a carnivore marketplace rally and would not beryllium sustained.

Bitcoin topped $17,000 trading astatine its highest level since Nov. 15 earlier paring gains. The world's largest cryptocurrency was trading 2% higher astatine $16,879.50 astatine astir 2:37 a.m. ET.

Other integer coins were besides up, including ether, which roseate 5% to $1,271.72.

Vijay Ayyar, vice president of firm improvement and planetary astatine crypto speech Luno, said the determination higher was apt a effect of "over leveraged shorts covering."

Someone who shorts an plus borrows immoderate of that asset, sells it astatine a higher terms past buys it backmost astatine a little terms and banks the nett from that. A abbreviated covering is erstwhile a trader buys the plus backmost astatine the little price. That tin origin the terms of that plus to determination higher.

Ayyar said the terms of bitcoin has "hit resistance" astatine $17,000 and is apt to spell little from there.

"This is conscionable a bearish retest," Ayyar said.

Investor assurance successful cryptocurrencies has been hammered aft Sam Bankman-Fried's speech FTX collapsed and filed for bankruptcy this month, sending shockwaves done the full industry.

Contagion from the fallout is spreading. Crypto lender and speech BlockFi filed for bankruptcy arsenic a effect of vulnerability to FTX.

More than $1.3 trillion of worth has been wiped disconnected the cryptocurrency marketplace this year, sparked by the nonaccomplishment of the algorithmic stablecoin terraUSD successful May and implosion of hedge money Three Arrows Capital. The FTX illness has worsened the situation.

Traders volition besides beryllium intimately watching the contents of a speech by U.S. Federal Reserve Chair Jay Powell astatine the Brookings Institution connected Wednesday for clues astir the cardinal bank's involvement complaint plans. If the marketplace thinks the Fed volition dilatory the gait of complaint hikes, it could springiness a boost to hazard assets specified arsenic stocks and bitcoin.