Jaipur (CoinChapter.com) — There’s no doubt that the recent bitcoin price crash has left investors salty.
Especially folks who entered the “euphoria” stage looking to make a quick buck. Bulls attempted to pare BTCUSD losses, leading to a little more than $10,000 to bitcoin spot rates. But was this a “dead cat bounce,” as some analysts have termed it? Or is the top cryptocurrency actually ripe for a bullish breakout?
A Dead Cat Bounce?
Income Generator (IG), in its recent bitcoin market analysis, on Seeking Alpha, took a U-turn concerning investment sentiment in bitcoin. According to IG, the BTC price momentum has turned bearish after the recent price crash. Investors looking to exit their positions should do so as soon as the bitcoin price hits its next charted resistance.
Citing reasons for its bearish take on bitcoin, the market analyst stated that during the crash, BTC fell by more than $35,000. An even if it attempted recovery with a $10,000 rally, it was nothing less than a dead cat bounce. Adding to the commentary, the investment advisor exhorted holders to practice caution. As any bitcoin price rallies could be short-lived and laced by incessant selling pressure.
Unfortunately, these figures meet the criteria of what would be required for a “dead cat bounce” to occur, and this suggests that any upcoming rallies in BTC-USD could be limited by selling pressure and supply levels near the May 26th highs (which rest just under the $41,000 handle). For these reasons, we think that investors with long exposure to BTC-USD should look to exit positions near the $40,000 mark if we do see further buying activity into these areas.
Income Generator augurs that BTC could enter bearish territory upon a dip below the $30,000 mark. When that happens, there will be mayhem, and bitcoin’s revisit to November 2020 levels around $16,000 would become inevitable.
But Technicals And Fundamentals Say Otherwise
After peeking at the daily bitcoin US Dollar price chart, one can understand why a bullish breakout for the flagship crypto coin is near.
The BTCUSD pair, after a bout of trading within a wedge formation, printed a green candle on the 1D chart. This indicates that bulls are ready to pull up the benchmark digital asset from its abysmal bearish depths. However, it is important to note that a similar trend showed up on January 14 this year post which a dip followed.
But then, the RSI (Relative Strength Indicator) and MACD (Moving Average Convergence Divergence) indicators were also bearish and pointed towards a selloff. The MACD indicator has printed a bullish crossover in the latest bitcoin price action scenario, with the 14-day RSI indicator insinuating an uptrend in the BTCUSD pair.
Apart from the above, bitcoin’s fundamental pointers are also relatively stronger. HODLing addresses have doubled compared to the previous year, and it’s just June! Whales have absorbed every bit of the recent selling pressure. And are convinced of BTC printing a much higher upward price trajectory shortly.
