Bitcoin bulls regroup after last week’s selloff

Bitcoin prices were tilting lower on Tuesday, but the No. 1 digital currency was holding well above last week’s nadir as it attempts to claw out of a hole that saw it shed more than a third of its value.

A single bitcoin

BTCUSD, -1.06%

 was worth about $3,988, compared with its low of $2,951 on Friday, set after J.P. Morgan Chase & Co.

JPM, +1.10%

 CEO Jamie Dimon described the asset earlier in the week as “a fraud” and a bubble. “It’s worse than tulip bulbs and won’t end well,” he said at a banking conference a week ago, referring to the 17th century mania over tulip bulbs that eventually burst.

Dimon’s comments, along with a number of negative statements from other Wall Street investors had put bitcoin on its heels, but it has reclaimed a portion of last week’s ugly losses, which technically put it in bear-market territory, described as a decline of at least 20% from a recent peak at $5,000.

On Tuesday, Ray Dalio, the founder of the world’s largest hedge fund, said bitcoin has all the makings of a bubble based on the firm’s criteria for the market phenomenon.

Still, the cryptocurrency boasts a 311% year-to-date return, compared with the Dow Jones Industrial Average

DJIA, +0.18%

 and S&P 500 index

SPX, +0.11%

which are up 12% or better so far this year.

One analysts, Okmar Godbole, writing for research and data site,, said bitcoin was trading above its 50-day moving average at $3,982, which may be interpreted as an upbeat sign.

However, it is worth noting that bitcoin and other digital currencies remain volatile, with double-digit percentage moves a normal occurrence, which may make drawing conclusions on its short-term fluctuations difficult.

Meanwhile, Ether tokens, trading on the Ethereum blockchain, were also attempting to recover from last week’s decline. One Ether token was buying $289 in recent trade.

Bitcoin’s total market value was at about $66 billion, compared with a recent low of $59.3 billion last week, according to research site Ether’s value was at $27 billion, compared with a recent low at about $21.6 billion last week.

Across the broader digital-currency segment, the total market value of an array of cryptocoins was at $137 billion, with bitcoin representing about 48% of that value, Coinmarketcap data show.

Beyond the downbeat remarks from Wall Street heavyweights, bitcoin and other currencies have been facing a number of regulatory headwinds. The Securities and Exchange Commission, which said late July that it was monitoring a recent trend of initial-coin offerings, a form of venture-capital raises tied to digital-currency-related enterprises. The SEC issued a report warning investors about the perils of such so-called ICOs:

“We are concerned that the rising use of virtual currencies in the global marketplace may entice fraudsters to lure investors into Ponzi and other schemes in which these currencies are used to facilitate fraudulent, or simply fabricated, investments or transactions,” the SEC’s Office of Investor Education wrote in an investor-advocacy report recently.

Read: What is an ICO?

Meanwhile, investors also have been watching China’s regulators, where Beijing watchdogs have been threatening to shutter cyber exchanges. China earlier this month declared ICOs illegal.

Chinese exchanges comprised a substantial share of trade. Earlier this year, the People’s Bank of China imposed limits on exchanges, and much of the volume moved to Japan and Korea.