Bitcoin has regained some poise, tracking signs of risk reset in traditional markets. The cryptocurrency’s immediate prospects remain tied to the newly detected coronavirus variant named Omicron’s potential impact on the Federal Reserve’s (Fed) monetary policy.

The top cryptocurrency by market value was trading near $57,300 at press time, representing a 7.3% gain compared to the low of $53,359 on late Sunday. Prices hit a high of $58,270 during the Asian hours.

The futures tied to the S&P 500 were trading 0.9% higher alongside gains in the pan-European Euro Stoxx 50 index and other risk assets like the Australian dollar and crude oil.

Buyers made a comeback on early Monday as reports from South Africa stated that Omicron patients seen so far have had “extremely mild symptoms”. On Friday, bitcoin and risk assets, in general, tanked after the news of a supposedly vaccine-resistant COVID variant coming out of South Africa raised the specter of economically painful lockdowns. The World Health Organization (WHO) deemed the Omicron variant, as a variant of concern.

“Bitcoin is largely being grouped with other risk assets at the moment,” Matthew Dibb, COO and co-founder of Stack Funds, said. “After Friday’s collapse in equities, we have seen some buying in major coins, but it’s too early to say whether it will continue.”

There is a consensus in the market that central banks and governments would quickly step in with more stimulus if asset prices slide on potential lockdowns in major economies.

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The Fed recently announced the beginning of the gradual unwinding of its $120 billion per month asset purchase program. According to Goldman Sachs, the central bank could accelerate the so-called taper from January.

Traders are likely to closely watch Federal Reserve Chairman Jerome Powell’s testimony to U.S. Senate in a speech titled Coronavirus and CARES Act on Wednesday.

Bitcoin may resume the broader upward trajectory if Powell assures markets of unlimited support in the event of a worsening pandemic. According to WHO, the risk associated with Omicron is very high, adding that the newly found variant is “highly divergent” and likely to spread at a very high speed.

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While Powell is scheduled to give the opening remarks at an event introducing the New York Innovation Center at 8:03 p.m. UTC on Monday, the chairman is unlikely to comment on coronavirus, inflation, and interest rates.

Bitcoin’s recovery has taken the shape of a bull flag on the hourly chart. A breakout could accelerate the recovery, perhaps bringing a re-test of $60,000.

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