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The Bitcoin price is experiencing a “dead cat bounce” after its worst crash this year. BTC is trading at $30,500, which is above this week’s low of $25,300. It is well below its all-time high of almost $70,000. So will this recovery continue?
Bitcoin Recovery
The BTC price has made some gains in the last few hours as investors pushed to buy the dip of the coin. Many market participants believe that the coin has become extremely cheap, considering that it had its worst week this year.
A closer look at the market shows that the recovery of BTC reflects that of the stock market. Over the past two days, technology stocks have performed somewhat positively after some notable developments. The Nasdaq 100 index has risen from its weekly low of $ 11,700 to $ 12,213. Recently, we have observed a close correlation between technology stocks and digital currencies.
In addition, the Bitcoin price has remained stable, as Tether has also held up quite well. On Thursday, the stablecoin lost its peg for a while, which caused many investors to worry about its future. At the same time, the Terra-USD stablecoin continued to struggle.
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Another reason why Bitcoin is doing well is that many large investors seem to hold their shares in the coin. For example, Bill Miller, a legendary investor, said in an interview with CNBC on Thursday that he still holds his fortune. Other investors such as Tesla and MicroStrategy their shares have not yet been sold.
Nevertheless, investors should enjoy this rally with caution. Historically, assets tend to recover briefly after a large sell-off. This happens when investors buy the dip. In most cases, the relief rally, which is often called the dead cat bounce, tends to subside.
Bitcoin Price Prediction
The four-hour chart shows that the BTC price formed a hammer pattern on Thursday. In price action analysis, this is one of the most reliable bullish reversal candlestick patterns. The coin is now stuck at the 25-day moving average, while the Relative Strength Index (RSI) is pointing upwards.
Therefore, there is a possibility that the Bitcoin price will continue to rise over the weekend, especially if the Nasdaq-100 index closes in the green. However, in the coming days, there is a probability that the pair will continue the downtrend in the coming week.
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