BTC is enjoying a dead cat bounce following its worst drop of the year. Bitcoin is currently trading at $30.5K, up from this week’s low of $25.3K. It has dropped drastically from its ATH of about $70K. So, how long will this recovery last?
BTC’s Comeback
The Bitcoin price has risen as speculators hurry to buy the coin at a discount in recent hours. Given that the token has suffered its worst week in 2022, several market players believe it has become exceedingly cheap.
A closer examination of the market reveals that the Bitcoin recovery is similar to the stock markets. After several noteworthy developments, technology stocks have been somewhat positive over the last 2-days. The Nasdaq 100 index has recovered from a weekly low of $11.7K to a current value of $12,213. We’ve recently witnessed a strong link between tech equities and cryptos.
Furthermore, the BTC price has remained stable as Tether has performed well. Several investors were concerned about the stablecoin’s survival on 12th May when it slipped its peg for some time. USDT had been in a downward spiral for some time when this occurred.
Another factor for BTC’s success is that many large investors appear to be sticking with it. According to Bill Miller, one of the world’s most well-known and respected investors, his investments are safe. Other investors, such as MicroStrategy and Tesla, have yet to sell their holdings.
Nonetheless, investors should treat this surge with caution. After a large sell-off, assets tend to rebound back shortly. When investors purchase the drop, this occurs. In most circumstances, the consolation rally, also called a dead cat bounce, appears to fade away.
BTC Price Forecast
On 13th May, the Bitcoin price created a hammer trend on the 4-hour chart. It is among the most consistent bullish recovery candlestick trends in price action research. The coin is currently trapped at the 25-day MA, with the RSI pointing up. As a result, the BTC price may continue to rise throughout the weekend, particularly if the Nasdaq 100 index draws to the green. A possible scenario for this week involves a return of the pair’s downtrend.
Saylor’s Comparison Between BTC and Other Assets
Although BTC’s price has fallen from its ATH in November, MicroStrategy CEO Michael Saylor believes the reference cryptocurrency is still the best hedge against inflation. BTC is the most effective inflation hedge. BTC has risen 149 percent since $MSTR reported its first Bitcoin buy on August 11, 2020, exceeding PPI (33% ), Silver (-17%), S&P (18%), US Homes (28%), M2 (19%), Nasdaq (5%), CPI (11.2%), Gold (-9%), on 12th May, Saylor posted in his Twitter account.
The CPI increased 8.3% in April, somewhat slower than the rate of growth witnessed in March. The market continued to rise to levels not seen in more than four decades. The United States Federal Reserve has reacted to increasing inflation by raising interest rates twice, by 0.25 percent and 0.5%, respectively, and may raise rates again in June by 0.75%. There is a possibility that when short-term correlation increases, cryptocurrency will follow the stock market downturn.
On the other hand, MicroStrategy is holding on to its Bitcoin acquisitions, with numerous dip-buys bringing the total to 129,218 BTC. Saylor earlier stated that there are no intentions to sell the corporation. MicroStrategy paid $30.7K for their BTC.
