Bitcoin (BTC) recently rose back above $30,000, inciting some hope among traders that the token may be in recovery mode.
But analysts are skeptical over the nature of the recovery, with many cautioning that it may be a “dead cat bounce.”
BTC is currently trading at $31,500, up nearly 7% over the past three days. While it has recovered to back above $30,000, popular Twitter analyst @CryptoDonAlt opines that it needs to confirm at least two more levels for a breakout.
Until then, sentiment over the token is likely to remain bearish, considering it has more than halved from a record high hit last year.
BTC needs to first confirm $31,800, then $34,000
CryptoDonAlt said in a Twitter post that the token has struggled to confirm $31,800, and is now “bearishly retesting” the same area. While the token did trade as high as $32,000 in the past few days, it has almost immediately slumped back below the level.
After clearing $31,800, BTC will face $34,000 as its next resistance point before a breakout. But clearing this, it could set the token up for further gains.
Kinda have to lean bearish here, at least until $34k is reclaimed and closed above. If we do reclaim it though, I’m down to full send it.
-CryptoDonAlt
Bitcoin tracks relief rally in stocks
A bulk of BTC’s recent gains have been driven by a strong recovery in stock markets. For instance, the Nasdaq 100- BTC’s closest parallel in stock markets rose 7% in the past five days, with a similar performance from the token.
But U.S. stock futures indicate that this rally may be running out of steam, with Wall Street set for a largely flat open today.
As such, BTC’s recovery rally may cool down similarly, keeping the token in a bearish trend for the near-term.
The factors that contributed to stock and crypto market weakness are still in play. Rising inflation and interest rates have largely eroded appetite for risk-driven assets this year.
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