Bitcoin Prices Surge More Than 25% As Cryptocurrencies Recover

bitcoin prices rose more than 25% today, climbing higher after suffering a sharp sell-off over the last few days.

The digital currency had surged to as much as $3,747.73 at the time of report, after plunging to $2,951.15 earlier in the day, according to the CoinDesk Bitcoin Price Index (BPI).Because of this sharp increase, Bitcoin prices climbed roughly 27% in less than seven hours.

Crypto Market Sell-Off

Bitcoin fell as the broader digital currency space suffered a sell-off.

Earlier today, the total market capitalization (market cap) of these digital assets fell to $97.6 billion, the lowest since the beginning of August, CoinMarketCap figures show.

Classic' News Trading

Lucas Geiger, founder and CEO of Wireline, provided similar input, describing the situation as "the classic crypto regulatory news trading pattern."

He speculated that an influx of retail investors has amplified the situation of crypto markets being fueled by the latest news.

Bitcoin Bounces Back

As for what caused Bitcoin prices to recover following their sharp drop, the simplest explanation is that traders over reacted to the latest news out of China and oversold the currency.

After Bitcoin prices fell to their recent low below $3,000, traders simply recognized the opportunity and purchased the digital asset, causing its price to rise sharply.

Even its sharp drop, Bitcoin has climbed more than 250% YTD, outpacing many other assets.

Disclosure: I own some Bitcoin and Ether.