The Bitcoin price is having a dead cat bounce after experiencing its worst crash this year. BTC is trading at $30,500, which is above this week’s low of $25,300. It is significantly lower than its all-time high of almost $70,000. So, will this recovery hold?
Bitcoin recovery
BTC price has made some gains over the past few hours as investors rush to buy the coin’s decline. Many market participants believe that the coin has become extremely cheap given that it had its worst week this year.
A closer look at the market shows that the BTC recovery mirrors that of the stock market. In the past two days, technology stocks have been a bit positive following some notable developments. The Nasdaq 100 index has risen from the intra-week low of $11,700 to $12,213. Recently, we have seen a close correlation between tech stocks and digital currencies.
Moreover, the price of Bitcoin has remained stable since Tether held up pretty well. On Thursday, the stablecoin lost its peg for a while, which left many investors worried about its future. This happened as the stablecoin Terra USD continued to struggle.
Another reason why Bitcoin is doing well is that many big investors seem to be holding their stakes in the coin. For example, in an interview with CNBC on Thursday, Bill Miller, a legendary investor, said that he was still holding his assets. Similarly, other investors like Tesla and MicroStrategy are yet to sell their stakes.
Nonetheless, investors should take this rally with a grain of salt. Historically, assets have tended to rebound briefly after a selloff. This happens when investors buy the dip. In most cases, the relief rally, often known as 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) has pointed upwards.
Therefore, it is possible that the price of Bitcoin will continue to rise over the weekend, especially if the Nasdaq 100 index closes in the green. However, in the coming days, the pair is likely to resume its downtrend in the coming week.
