Bitcoin has recovered after dipping below $30,000 for the first time in weeks and is now trading just shy of the $33,000 mark.
An expert has however warned that this is most likely a ‘dead cat bounce’ and that the crypto is most likely going to dip further, heading towards $24,000.
Bitcoin recently dipped below $30,000 for the first time in weeks as sell-off peaked and panic seemed to grip the market. However, in the past day, it has recovered and now looks headed toward’s notching a 10 percent rise since the plunge. The top crypto is, however, not out of the woods yet and this is most likely a ‘dead cat bounce,’ one crypto expert has warned.
At press time, Bitcoin is trading at $32,620, having gained 2.24 percent in the past 24 hours according to our data. The crypto has set an intra-day high at $32,761 as it seems destined to breach $33,000 for the first time since July 13. Surprisingly, the volume has dipped by 28 percent to $20 billion.
The factors behind the recent comeback aren’t clear, but some analysts have pointed at the B-Word conference as a significant force. The event saw three of the industry’s most important voices – Elon Musk, Cathie Woods and Jack Dorsey – talk Bitcoin and debunk some of the commonly-held myths. One of the biggest takeaways was that Elon Musk was still pro-Bitcoin and that Tesla might one day re-admit BTC as a payment method.
Bitcoin supply shock is currently at levels that previously priced Bitcoin at $50-$60K.
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— Will Clemente (@WClementeIII) July 23, 2021
Expert: Just a dead cat bounce, BTC could drop to $24,000
The current uptrend has many crypto fans optimistic that the crypto will soon reclaim some of its former high. However, according to one expert, this may not last all that long and we might even drop further than we did this week.
Vijay Ayyar, the head of Asia-Pacific at Luno crypto exchange believes that we may just be seeing a dead cat bounce. This is a market phenomenon in which an asset briefly recovers from a prolonged decline, but shortly after, it slides back, usually tumbling lower than it had initially.
For Ayyar, the defining point for the current rally will be whether Bitcoin can finally break past $33,000. As long as BTC trades below this level, there’s a high risk that it could plunge and breach $30,000. Speaking to CNBC, Ayyar stated that should Bitcoin be unable to break $33,000, its next support will be at $24,000.
On what’s behind the current recovery, he stated, “We saw broad market rallies across the board last night as well, and I think crypto is just playing off of that.”
In general, there are a lot of macro factors weighing down on risk-on assets at the moment — inflation worries, Covid, and with crypto, we’ve got more specific worries such as much more regulatory oversight.
As Bitcoin recovered, altcoins made a comeback as well. Ether has rallied 4 percent to reclaim $2,000 while XRP is 6 percent up. Polkadot and THETA made the most impressive gains among the top coins at 10.7 percent and 11.8 percent respectively.
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