Bitcoin rose back above $10,000 today after falling below the psychologically important level yesterday, but analysts continued to strike a bearish tone.
At the time of writing, bitcoin's price was up 4.24 per cent at $10,247.64 according to Coindesk's aggregate price index, recovering from a low of around $9,500 early this morning.
The number one cryptocurrency has lost the momentum that launched its price to nearly $20,000 a coin late last year – earlier this month it tumbled below $7,000 before recovering to around $10,000.
Lukman Otunuga, research analyst at FXTM, warned that the move back to $10,000 could have just been a temporary recovery.
"Although the cryptocurrency has staged a recovery back towards $10,000 as of writing, the price action witnessed this week suggests that bulls are exhausted. Sustained weakness below $10,000 could spark discussions over the recent rebound being nothing more than a dead cat bounce," Otunuga said.
Iqbal Gandham, UK managing director at eToro, said the announcement earlier this week that the Treasury select committee was launching an inquiry into cryptocurrencies was one reason prices had struggled to recover.
The European Commission's vice president Vladis Dombrovskis today also said a group of experts will discuss the possibility of introducing regulations for cryptocurrencies next week.
Gandham added that price swings were to be expected with cryptocurrencies still in their early stages of development.
Other digital currencies rose as well, with ethereum, litecoin and Ripple's XRP each up between five and seven per cent at the time of writing.