Bitcoin (BTC): Just a Dead Cat Bounce?
The recent rally called for a skeptical position, suggesting the rapid price climb may be one last move before an even deeper crash.
Bitcoin (BTC) seems to be off to a successful second half for 2019. But prices are highly unpredictable, and a position is forming around the idea that the recent price move above $11,000 may be a “dead cat bounce”. This type of price move follows a lengthy slide, with the price bouncing just before sinking even lower.
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In the past, BTC has indeed gone through a short-term rally, before sinking lower. In May 2018, BTC went as high as $9,000, only to continue sinking to lows of $3,200 in December 2018.
This time, the price is parabolic once more, going more than halfway to the all-time high of $19.600. The predictions are for a trek as high as $17,000.
A dead cat bounce is also a pattern used for the stock market, where price fluctuations are driven by a much wider investor base. In the case of BTC, the price has followed a different type of logic. The price is also much more volatile in comparison to traditional assets, and a 30% correction is not out of the question.
The more probable reason may be outright enthusiasm for a rising asset. According to the SFOX brokerage, the recent climb to $11,000 and above is a sign of renewed interest in BTC:
“While the current rally has not been as dramatic as 2017, there are signs that FOMO is still playing a role; for instance, Google Trends, Google’s service for tracking the popularity of search terms, shows that this most recent rally has corresponded with the highest volume of search traffic for the term ‘bitcoin’ since early 2018,” said the SFOX research team in a statement for Cryptovest.
But added to the retail enthusiasm, there may be enough effort on the side of whales to boost the BTC price. In the past six months, liquidity has been accumulating on the markets, boosting the potential for even larger price moves. This week’s rally is seen as just a small stop on the path to surpassing the $20,000 record.
Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.