Bitcoin Briefly Tops $7K as Traders Say Worst of 2020 Sell-Off May Have Passed

Bitcoin (BTC) rose Thursday for the fourth straight session and briefly climbed above $7,000 for the first time in three weeks.

The bellwether cryptocurrency was up 2.5 percent to $6,821 as of 19:22 UTC (3:22 p.m. in New York.) Earlier, the price rallied as high as $7,236 before pulling back.

The four-day increase has helped bitcoin claw back some of its losses during the first three months of the year, when the spreading coronavirus and increasingly dire economic prospects sparked a flight for cash among investors in both traditional and digital-asset markets.

Joe DiPasquale, CEO of BitBull Capital, a San Francisco-based hedge fund specializing in cryptocurrencies, said he saw no clear driver of Thursday's move. Market signals show a growing conviction among bitcoin traders that prices won't fall below $6,000 in the short term, but rallies above $7,000 appear to be drawing in sellers, he said.

See also: Crypto Wants Stronger Public Response to Coronavirus, CoinDesk Survey Shows

"You have so many people trying to swing trade on crypto," DiPasquale said in a phone interview.  

Traditional financial markets were whipsawed again as Wall Street investors speculated that major oil producers including Saudi Arabia and Russia might agree on production cuts to help to stabilize prices. Oil jumped 22 percent to $24.77 a barrel, and the Standard & Poor's 500 Index rose 2.3 percent.

The S&P 500 is still down 22 percent for the year to date, while bitcoin has now trimmed its 2020 losses to just 5.5 percent.

DiPasquale said many bitcoin traders are looking ahead to May's expected "halving," when the supply of new units of the cryptocurrency issued by the underlying blockchain network is scheduled to drop by 50 percent. The once-every-four-years-event was coded into the 11-year-old bitcoin's original programming as a way of minimizing inflation.

See also: Bitcoin Halving, Explained.

The halving comes as the U.S. Federal Reserve is poised to inject an estimated $4 trillion of new liquidity into the global financial system to help stabilize markets, roughly equivalent to the total amount of money created on the central bank's balance sheet since its founding in 1913. Investors including Mike Novogratz, CEO of the cryptocurrency-focused investment firm Galaxy Digital, say such moves could "debase" the value of the dollar.

"That literally is a printing press," Novogratz told CNBC on Thursday. "I'm getting calls from real big investors we've never seen before, saying, `Tell me about this bitcoin.'"

Novogratz said he expects bitcoin's price to double within the next six months and potentially climb above its previous record near $20,000 by the end of the year.

Marc Hochstein contributed reporting.

UPDATE (April 2, 21:00 UTC): An earlier version of this article misstated the date of the last time bitcoin traded above $7,000. It was March 12, not 11. The article has also been updated with new information.