Bitcoin rallied sharply on Tuesday, as investors returned to the market to seek cheap valuations in wake of recent losses which took prices a three-month low on Monday.

Bitcoin (BTC/USD) jumped 7.16%, or $32.51, on Slovenia-based BitStamp to trade at $486.35 during U.S. morning hours.

A day earlier, prices on BitStamp fell to $444.44, the weakest level since May 19, before trimming losses to settle at $475.22, down 4.35%.

Bitcoin prices were likely to find support at $441.51, the low from May 19, and resistance at $510.00, the high from August 18.

Elsewhere, the price of a Bitcoin on Bulgaria-based BTC-e surged 8%, or $34.59, to trade at $466.94.

Prices on BTC-e plummeted to $309.00 on Monday, in what is being referred to as a "flash crash", before recovering to end the day at $440.04.

According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency advanced 3.54% to trade at $476.97.

Meanwhile, euro-denominated Bitcoin prices Bitcoin (BTC/EUR) rose 4.38%, or €15.47, to trade at €369.00 on U.S.-based Kraken Exchange.

Market participants speculated that Monday's losses came as a result of excessive margin trading, which caused a flash crash on the BTC-e platform and at least on one additional exchange.

The steep decline then had a cascading effect across the larger Bitcoin market, which dragged prices sharply lower.

A number of traders and market analysts also attributed the plunge to price manipulation by short-term profiteers who are deliberately driving prices down to eventually buy them back at lows.

Prices of the virtual currency have lost more than $100, or 17%, since the U.S. Consumer Financial Protection Bureau issued a lengthy set of risks that virtual currencies pose to consumers on August 11.

Bitcoin is digital cash and is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.

Start Trading
Follow us in social networks!
Live Chat
Leave feedback