Bitcoin’s Price Soars above $4K; is it a “Dead Cat Bounce”?
Is it a ‘dead cat bounce’? Bitcoin’s price soars above the $4,100 level after posting significant losses in the past two weeks. The flagship currency has hit this year’s low of $3,500 last week, which some traders believe is the bottom of the bearish trend.
Bears, on the other hand, consider the rally in the BTC price as a ‘dead cat bounce’. Clem Chambers, CEO of ADVFN and Online Blockchain plc, is among the analysts who expect the Bitcoin price to fall further to reach the floor of the bearish trend.
He says, “Some will suggest that the war in Bitcoin Cash is over and now the market is clear to recover. It’s a possibility, but I expect a move into at least the mid-$2000 before the crash is over.”
Echoing Clem Chambers comments, Dr. Ben Laker from Henley Business School claims that the market could post more losses in days to come. He based his prediction on the historical price trends.
Dr. Laker said: “Bitcoin’s price is freefalling as its bear market deepens, so what does all of this mean for the wider industry? The previous bear market was sizeable – this, unfortunately, indicates more months of pain.”
Cryptocurrency Market is Here to Stay
Although some analysts are not optimistic about the massive bull-run in cryptocurrency prices, they expect crypto coins to remain a mainstream asset.
Allianz’s Chief Economic Adviser, Mohamed El-Erian, blames the Bitcoin cash hard fork for the selloff, and he believes these types of specific events can’t collapse the market to zero. However, they don’t expect Bitcoin and the rest of the market to achieve a new all-time high in the future.
“I think cryptocurrencies will exist, they will become more and more widespread, but they will be part of an ecosystem. They will not be dominant as some of the early adopters believed them to be,” El-Erian said.
The rebound in cryptocurrency markets is associated with traders’ strategy of capitalizing on the sharp drop in prices. Bitcoin’s price bounced more than 10% today, the most significant price increase in a single day since July 2018. Although we cannot call it a ‘dead cat bounce’, it’s also too early to say that the Bitcoin price would cross $10k by the end of this year.
What’s your opinion about the rally in cryptocurrency markets? Do you believe it is a ‘dead cat bounce’? Let us know about your thoughts in the comments section below.