A recent bearish report from the International Monetary Fund (IMF) has spooked Bitcoin investors, but some see it as a buying opportunity. However, many experts are skeptical about the price making a big comeback anytime soon.
The “bitcoin price analysis” is a blog post by an analyst who believes that the bitcoin price could bounce to $35K in 2019. However, he says don’t expect a “V-shaped recovery.”
The initial panic triggered by Bitcoin’s sell-off, Terra’s UST collapse, and numerous stablecoins losing their dollar peg starts to subside on May 13, as risk-taking traders attempt to grab up assets selling at annual lows.
Market performance on a daily basis. Coin360 (source)
Despite the recent large downturn, Bitcoin (BTC) bulls have clawed their way back to the $30,000 zone, a level that has been defended numerous times throughout the 2021 bull market.
Here’s what a few experts have to say about Bitcoin’s future prospects as the price seeks to rebound in the face of several obstacles.
Is a brief squeeze in the cards?
Cryptocurrency analytics tool Coinalyze examined Bitcoin long to short positions for BTC/USD perpetual contracts on ByBit, providing insight into the thoughts of derivatives traders.
Long/short BTC/USD accounts ratio vs. BTC/USD perp 1-day chart Twitter (source)
The interest in shorts, which is indicated in red in the bottom part of the chart above, has increased throughout the current market collapse, suggesting that derivatives traders anticipate further downside in the near term.
“As seen by the ByBit long/short ratio and financing rate, sentiment has been highly negative in recent days. A brief squeeze/bounce is anticipated “In private remarks, Coinalyze creator Gabriel Dodan told Cointelegraph.
A breakthrough to $35K is likely in the near future.
According to David Lifchitz, managing partner and chief investment officer of ExoAlpha, Bitcoin’s decline to $26,716 on May 12 was important because it fell below the May 2021 low of $28,600, “which was considered as the last man standing for BTC.”
The rebound on May 13 was predicted, according to Lifchitz, since “a lot of negative news had been flushed out” and the “panic move from the UST disaster had already happened.”
According to Lifchitz, Bitcoin’s lows in May 2021 “seem like a reasonable entry opportunity here with a tight stop should the purge continue,” but traders shouldn’t anticipate a comeback to $60,000 overnight and should instead establish a more modest short-term aim of $35,000.
According to Lifchitz,
“Long at $28.5K/Stop at $26.5K/Profit Target at $34.5K = $6K upside / $2K downside = 3/1 win/loss ratio and it appears good to me from an investing standpoint.”
Related: Should you buy the dip now or wait for maximum pain? Analysts disagree over whether Bitcoin’s price has reached bottom.
It’s unlikely to see a V-shaped recovery.
Market analyst and pseudonymous Twitter user ‘Rekt Capital’ provided insight into what it would take for Bitcoin to regain its bullish momentum, posting the following chart, noting that BTC “needs to keep $28,600 as support for the price to challenge $32,000,” while a “weekly close below the green would be bearish.”
1 week BTC/USD chart. Twitter (source)
While many optimistic traders expect a quick rebound from this current slump, Rekt Capital cautioned that “by historical norms, a dramatic V-shaped comeback to mark out a generational bottom is less plausible.”
According to the analysis,
“Many foresee one since the last BTC bear market bottom in March 2020 was quite turbulent. However, historical price data implies that longer ranges are more probable.”
The total cryptocurrency market capitalization is currently $1.287 trillion, with Bitcoin commanding 44.4 percent of the market.
The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.
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