Bitcoin climbed as high as $37,391 after falling some 7.5
percent a day earlier, and was last up 5 percent.
Second-largest cryptocurrency ether jumped more than 10
percent to as high as $2,321, erasing losses of 8.6 percent on Sunday that
pushed it to near a two-month low around $1,730.
The catalyst for the slump was cryptocurrency
"miners", who mint cryptocurrencies by using powerful computers to
solve complex maths puzzles, halting Chinese operations in the face of
increasing scrutiny from authorities.
The attention on Chinese miners - who account for some 70
percent of supply - is the latest front in a wider push by Beijing against the
cryptocurrency sector.
Major cryptocurrency exchange Huobi on Monday suspended both
crypto-mining and some trading services to new clients from mainland China,
adding it would instead focus on overseas businesses. Others also suspended
business in China.
In the short-term, market players said, that is likely to
lead to pressure on prices as miners sell Bitcoin held on their balance sheets.
"If they are pulling up stakes or shutting down, they
may need to reduce their balance sheets in the short term," said James
Quinn, managing partner at Q9 Capital, a Hong Kong-based cryptocurrency private
wealth manager.
'Tough spot'
Crypto market players said fears over the China crackdown
would likely linger.
"We tend to expect some stabilisation over the next
week, which should translate into a bounce, but nobody's really sure about what
happens next," said Joseph Edwards, head of research at crypto brokerage
Enigma Securities.
"Crypto clearly finds itself in a tough spot in terms
of the narrative right now, and it's taken a lot of oxygen out of the
room."
Bitcoin had stabilised from a bruising week on Saturday
after Tesla boss Elon Musk - whose comments on cryptocurrencies have been a key
price driver in recent months - tweeted support for crypto in "the true
battle" with fiat currencies.
Yet after last week's 25 percent drop, triggered in part by
toughening language from Chinese regulators, Bitcoin remains almost 45 percent
below last month's record high of $64,895.
Its slump has pulled Bitcoin roughly back to its level
before Tesla unveiled in February a $1.5 billion itcoin purchase and made a since-reversed
decision to accept it as payment.
Ether has fallen by half in just 12 days since its peak of
$4,380, with other smaller cryptocurrencies such as Dogecoin also suffering
heavy declines.
© Reuters