Bitcoin struggles to break $40,000 after weekend sell-off

Cryptocurrencies continued to recover weekend losses. Photo: Getty Images
Cryptocurrencies continued to recover weekend losses. Photo: Getty Images

Bitcoin and other major cryptocurrencies continue to recover their losses but the market is struggling to recapture previous ground after heavy selling at the weekend.

Bitcoin (BTC-USD) was up 6.7% to trade at $39,070.55 (£27,506.45) on Tuesday morning, inching towards $40,000 but not quite being able to get there.

Ethereum (ETH-USD), the second most popular cryptocurrency, was up roughly 20%, trading at $2,668.4797. Meme-inspired dogecoin (DOGE-USD) rose 14% to trade at $0.3648.

In the past 12 hours, Tesla (TSLA) CEO Elon Musk, a crypto advocate, has tweeted twice about dogecoin and once about bitcoin.

He asked Twitter users for ideas to develop dogecoin, and also tweeted: "Someone suggested changing Dogecoin fees based on phases of the moon, which is pretty awesome haha."

With regards to bitcoin, he said he was in talks with North American Bitcoin miners about the crypto’s environmental impact.

Watch: What is bitcoin?

One of the miners was London-based Argo Blockchain (ARB.L).

Its CEO Peter Wall said: “Sustainability has always been at the heart of Argo's mining operations and the newly-formed Bitcoin Mining Council is the next logical step in fostering a sectoral shift towards renewable energy. I enjoyed speaking with Elon Musk about these issues this weekend.”

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The environmental impact of mining cryptocurrencies has often come under scrutiny, most recently when Musk said Tesla will no longer accept bitcoin due to concerns over its carbon footprint.

Read more: How bad is bitcoin for the environment?

“Bitcoin prices are trying to stabilise today as Elon Musk seems to be favouring it again,” said Naeem Aslam, chief market analyst at Ava Trade.

“His tweet about having a conversation with North American bitcoin miners is clear evidence that the billionaire hasn’t abandoned bitcoin all together... his tone about bitcoin seems to be positive,” said Aslam.

He also said US cryptos may have got a boost with Federal Reserve governor, Lael Brainard, promoting the idea of a digital currency backed by the Federal Reserve.

The crypto recovery comes after a deep sell-off over the weekend. By Sunday afternoon, the global crypto market had lost 9% over the last 24-hours, according to data provider CoinMarket.

The slump followed a volatile week, which included talk of a crackdown in China.

Last week Chinese vice-premier Liu Hu said China would "severely crack down on illegal securities activities and severely punish illegal financial activities."

Watch: What are the risks of investing in cryptocurrency?