(Reuters) -Bitcoin hit its highest in two weeks on Saturday, extending the previous session's strong gains as cryptocurrencies basked in a recovery in risk appetite and a rally in stock markets.
The world's largest cryptocurrency hit $41,983, taking gains from Thursday's lows to nearly 16%, and marking a 27% rise from the year's low of $32,950.72 on Jan. 24.
Ether, the coin linked to the Ethereum, blockchain network, scaled the $3,000 level for the first time since Jan. 21.
Bitcoin (BTC) jumped to a two-week high on Friday as crypto traders grew more confident that the market has stabilized following a recent slump, and some analysts flagged the possibility of a short squeeze.
The bitcoin price rose 8.9% over the past 24 hours to about $40,219, pushing past the key psychological threshold of $40,000 for the first time since Jan. 22. The largest cryptocurrency remains well off its all-time high of around $69,000 reached in December.
Friday's 11%-plus was the biggest single-day gain for bitcoin since mid-June, and the first major bounce after weeks of being roiled, along with technology and growth stocks, by fears of faster-than-expected Fed rate hikes to curb a surge in inflation.
It came alongside a rally in U.S. stocks, with the tech-heavy Nasdaq ending the week with gains despite the heavy volatility from earnings, including Amazon's robust growth and Facebook-owner Meta Platforms Inc's disappointing results.
Those synchronized moves showed how bitcoin has become far more of a mainstream asset, jolted by swings in risk-appetite.
"The current panic and volatility surrounding bitcoin is based on a fundamental misunderstanding of it as an asset class," said Ed Hindi, chief investment officer of Swiss-based cryptocurrency hedge fund NCR Capital.
"When valuations on the Nasdaq fall, misguided institutional investors start liquidating bitcoin positions as if it were a tech stock."
Khan said his next target for the price level on the upside is about $42,000 to $43,000. He sees market support at $33,000 – or $28,000 in the worst case, "which we have not touched."
On an intraday basis, bitcoin has pierced above the top of its weeklong price range, after holding support above the $35,000 to $37,000 zone.
The recovery in stocks boosted other listed crypto assets on Friday, with miner Riot Blockchain getting a bump after declaring bitcoin production more than doubled in January from a year earlier.
Marathon Digital Holdings rallied after reporting bitcoin production increased, as did crypto exchange Coinbase Global, which rose more than 7%.
Theoretically, such a report would be negative for bitcoin because the Federal Reserve might need to move more aggressively in hiking interest rates to keep the labor market from overheating. In general, bitcoin's price has responded negatively to tighter monetary policy.
"Bitcoin's initial knee-jerk reaction to the shockingly strong non-farm payroll report was weakness," said Edward Gaza, senior market analyst at the foreign-exchange brokerage Candy.
But he noted that "bitcoin has managed to stabilize despite rising inflationary pressures that continue to push global bond yields higher."
The 10-year Treasury yield broke above a two weeklong range of 1.92%. And the U.S. dollar also ticked higher over the past two hours, while stocks are roughly flat. Bitcoin often trades in sync with stocks.
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