Bitcoin Recovers and Heads to $ 33K, But Expert Warns of 'Dead Cat Bounce' and Notices a Further Fall Approaching
Bitcoin recently fell below $ 30,000 for the first time in weeks as the selloff peaked and panic seemed to take over the market. However, on the last day, it rallied and now appears to be heading for a 10% increase from the drop. However, the top crypto is not out of the woods yet and is most likely a 'dead cat bounce', a cryptocurrency expert has warned.
At press time, Bitcoin is trading at $ 32,620, having gained 0.9% in the last 24 hours according to our data. The crypto has set an intraday high at $ 32,761 as it looks set to break above $ 33,000 for the first time since July 13. Surprisingly, the volume has dropped 28% to $ 20 billion.
The factors behind the recent comeback are unclear, but some analysts have pointed to the B-Word conference as a significant force. The event saw three of the industry's biggest voices, Elon Musk, Cathie Woods, and Jack Dorsey, speak out about Bitcoin and debunk some of the most common myths. One of the biggest takeaways was that Elon Musk was still pro-Bitcoin and that Tesla might one day support BTC as a payment method again.
Expert: It's just a dead cat bounce, BTC could drop to $ 24,000
The current uptrend has many crypto fans optimistic that crypto will soon regain some of its old high. However, according to one expert, this may not last as long and we could even fall further than we did this week.
Vijay Ayyar, Asia-Pacific director at cryptocurrency exchange Luno, thinks we may be seeing a dead cat bounce. This is a market phenomenon in which an asset briefly recovers from a prolonged decline, but soon after, it pulls back, usually falling lower than it was initially.
For Ayyar, the defining point for the current rally will be whether Bitcoin can finally break above $ 33,000. As long as BTC is trading below this level, there is a high risk that it will sink and exceed $ 30,000. Speaking to CNBC, Ayyar stated that if Bitcoin cannot break out of $ 33,000, its next support will be at $ 24,000.
On what's behind the current recovery, he said: "Last night we also saw huge market rallies across the board, and I think cryptocurrencies are playing around with that."
In general, there are a lot of macro factors weighing on risk assets right now: concerns about inflation, Covid, and with cryptocurrencies, we have more specific concerns, like a lot more regulatory oversight.
As Bitcoin rallied, altcoins also made a comeback. Ether is up 4% to claim the $ 2,000, while XRP is up 6%. Polkadot and THETA made the most impressive gains among the major currencies with 10.7% and 11.8%, respectively.