Bitcoin (BTC-USD) has bounced back above $40K this morning after many analysts warned the crypto-market was teetering towards a prolonged bear cycle.
To support their pessimistic sentiment analysts pointed to the $400 billion slashed from the combined crypto market since early April.
However, today bitcoin bounced back to trade above the psychological $40,000 level, after the world's preeminent cryptocurrency briefly touched a five-week low of around $38,547 early on Monday.
The price of bitcoin as of the time of writing at 9.00 am UK time sits at $40,765, up 4.4% in the last 24 hours.
Read more: Crypto exchange rates live
Bitcoin volatility has slightly dampened throughout the last two months trading at a reduced level from its former all-time-high in November of $68,000.
The largest cryptocurrency by market capitalisation has maintained a range of between approximately $36,000 and $48,000 for the last two months.
It is commonly believed that Ethereum usually follows the price of bitcoin, and today it reinforced this perception as the price of ether (ETH-USD) had reached a low of $2,880 earlier in the day before recovering back to over $3,000.
The cryptocurrency market has been bolstered by the latest data from Glassnode, this helps to decommission the argument that the bitcoin price is manipulated by a cabal of 'whales' who own between 1 and 100 thousand BTC.
The Glassnode data has shown that the majority of whale addresses, those that contain over 100 to 100,000 BTC, have been shedding their assets throughout the year, and the number of these addresses has decreased in the first months of 2022.
In contrast to this trend, the number of holders of one to 10 bitcoin has steadily increased since the beginning of 2022.
Bitcoin's market capitalisation stands at $775bn and when its annual growth rate is taken into consideration it is projected to reach a market cap of $1tn in 2023.
Crypto market analyst Yuya Hasegawa of Bitbank spoke to Yahoo Finance and gave a short term projection of bitcoin's performance for the week ahead.
He said: "Demands for an inflation hedge are still high as demonstrated by higher gold prices and yields on US treasury bonds.
"So, bitcoin could struggle this week but the upper trend line running through the January and February lows will likely work as a support for the price.
"Bitcoin’s target range for the week: $36,000 to $43,000."
However, speaking to Forbes, FxPro senior market analyst Alex Kuptsikevich warned that the price of bitcoin could fall to a new low of $32,000.
He said: "The signal for a break of the mild upward trend would be a consolidation below the $38,000 per bitcoin levels.
"If the bulls capitulate, the first cryptocurrency could be pushed into the $32,000 to $35,000 range without much resistance."
Watch: Steve Hanke on Milton Friedman's 1999 cryptocurrency predictions