As for the US markets, if you are thinking that the dead cat bounce is going to last for some time, then perhaps you may be wrong. Traders should not be betting on the long side when it comes to equities and this is because we have seen these lifeless promises several times before. President Trump decided to delay the new tariffs on China by another 3 months and traders reacted way over the top yesterday. US Stock markets rebound after authorities announce a massive stimulus package, bitcoin continues to drop. The price of bitcoin surged over 8% over the last 24 hours as it reached above $6,400.
The trader recently sat down with CoinTelegraph to also discuss his expectations for the cryptocurrency market. ‘Dead cat bounce’ is a term used when a market manages to muster a rebound within a prolonged period of downside. The market notion behind the phrase is that if something falls with enough speed, even a dead cat would bounce. However, while such a rebound invariably happens, the trend is then expected to kick in, bringing the bearish influence back into play.
Some experts believe, that USDT may oust XRP from the third place if the trend stays in place. The crypto markets are experiencing a small relief rally during the week, as the price of Bitcoin (BTC) bounced from $8,400 towards $9,150. This information has been prepared by IG, a trading name of IG Markets Limited.
The coin retreated from the intraday high $7,191 as the recovery momentum faded away. BTC/USD has lost 1% since the beginning of the day, though it is still 2.65% higher from this time on Wednesday. Now it is trading with the short-term bearish bias amid low volatility. Following U.S. President Donald Trump’s declaration of a national state of emergency, the stock market strongly recovered, posting its largest single-day rally since 2008. The bitcoin price increased in tandem with stocks to around $5,650, stabilizing at the $5,500s.
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The double bottom pattern is formed at the 61.8% fib level support and BTC can bounce to $8000 area which is the next resistance area. Weekly prices have been rejected by the 9 days SMA previously; if this trend continues then the next support is at $6000. RSI (Relative Strength Index) is at 43.88 and Stoch RSI (Stochastic Relative Strength Index) is at the oversold region. By utilising the prior swing low as the entry point, we are ensuring that the trade is opened upon confirmation that a dead cat bounce has occurred.
Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. To a large extent, the view that we could see a dead-cat-bounce is the opposite from a buy-the-dip mentality, where traders are confident that the wider uptrend is going to come back into play despite recent losses.
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. 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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The leading cryptocurrency witnessed a positive rally on Monday as the price of bitcoin surged to $6,400 in just a few hours. But the surge in the price of bitcoin was just a dead cat bounce, and the price is expected to fall in the short-term.
Basically, he says BTC price predictions are merely guessing games given the lack of fundamentals behind bitcoin. CFD, share dealing and stocks and shares ISA accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number ) and IG Index Ltd (a company registered in England and Wales under number ). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. Both IG Markets Ltd (Register number ) and IG Index Ltd (Register number ) are authorised and regulated by the Financial Conduct Authority.
Bitcoin News will help you to get the latest information about what is happening in the market. If this is indeed a dead cat bounce, Brandt predicted a $1,200 low is in store for BTC, if the cryptocurrency drops below the $3,000 mark by the end of Q1 2019.
Perhaps bitcoin would be a good example of how a market can go from a buy-the-dip mentality to one of expecting that each rebound is merely going to be a dead cat bounce. If a company looks overvalued, many traders will short-sell its stock, expecting its price to go down. (A short seller borrows shares of stocks, immediately sells them, then buys them back to return the shares they borrowed.) When multiple traders exit a short-sale position, it causes a flurry of buying.
- The leading cryptocurrency witnessed a positive rally on Monday as the price of bitcoin surged to $6,400 in just a few hours.
- But the surge in the price of bitcoin was just a dead cat bounce, and the price is expected to fall in the short-term.
- The price of the leading cryptocurrency saw a positive rally on late Monday, but the surge in the price could just be a dead cat bounce, and the price might retrace back to below $6,000 in a hurry this week.
The supply of ETH isn’t controlled by any government or company – it is decentralized, and it is scarce. People all over the world use ETH to make payments, as a store of value, or as collateral. In the near future, he believes bitcoin will have less drastic price swings, but noted he doesn’t “think it’s going anywhere,” and pointed to the $4,600 mark.
The price of the leading cryptocurrency saw a positive rally on late Monday, but the surge in the price could just be a dead cat bounce, and the price might retrace back to below $6,000 in a hurry this week. Bitcoin witnessed one of the worst days in seven years on 12th March when the price of the leading cryptocurrency fell below $4,000 level in the space of a few hours. If the price fluctuates around some mid-range price, it indicates that the market has found a new stable value for this stock. In our example above, say that Grow Co.’s price declines to $75 then ticks back up to $85.
As a result, Tether moved into the fourth position on the list of top-10 coins. At the time of writing, Tether’s market value is registered at $6.3 billion.
Bitcoin Price (BTC) Recovery to $5.5k Can Be Dead Cat Bounce for This Reason: Trader
What’s more, the cryptocurrency is struggling to find acceptance above $6,859 (23.6 percent Fibonacci retracement). The failure to beat a less important Fibonacci hurdle only indicates how tough it could be for bitcoin to scale $7,008 (38.2 percent Fibonacci hurdle). In his May 26 blog post, Godbold observed that the bitcoin price has soared more than 120% between January’s low of $3,400 to its current value of $8,700. However, Godbold attributes that to a dead cat bounce, so crypto fans shouldn’t get too smug. BTC/USD Chart By TradingViewDaily prices are held by 9 days SMA (blue line), 21 days SMA (green line), and weekly 61.8% Fib level as shown in the below-given chart.
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For traders, the question on whether a rebound is going to form a meaningful bottom or simply provide a short-lived rebound before we head higher again is always going to be hugely important. To a large extent a dead cat bounce is a retracement, in comparison to a reversal. Coming in the midst of a sharp period of weakness, the existence of an established directional bias should help traders spot a dead cat bounce. The utilisation of both fundamental and technical analysis can help traders understand whether we are set for another leg lower or a wider recovery.
By the same token, Brandt traced out an 80% decline for BTC, which would see the blockchain-based asset fall to $3,933. Bitcoin is the first peer-to-peer digital currency, also known as cryptocurrency. It is famous for its decentralized transactions, meaning that there is no central governing body operating it, such as a central bank.
The price is also much more volatile in comparison to traditional assets, and a 30% correction is not out of the question. Kevin Godbold admits that he did not foresee the recent rally but says that’s because unlike with stocks, there’s no real data to gauge whether bitcoin is undervalued, overpriced, or just right.
Per Brandt’s words, a bounce above $4,000 will mean the cryptocurrency’s recent recovery is a dead cat bounce, and not a bull rally. Ripple’s XRP is again at risk to lose its third position in the global cryptocurrency market rating. COVID-19 has brought stablecoins to the forefront of the cryptocurrency universe as traders parked their assets in those assets to protect them from volatility. Also, fiat holders also bought stablecoins to be able to purchase digital coins once the opportunity arises.
Any time the market sees an uptick in buying, it causes a short term rise in prices. Sometimes this can bring more traders into the market, causing the stock’s price to rise further. The term “dead cat bounce” generally applies to daily trading activity. Traders typically won’t refer to this when a stock’s price varies up and down over the course of a single day. Although he painted a dismal picture for the short-term future of crypto markets, Brandt noted that eventually, he believes “it [will] get exciting again,” but didn’t give any specific timelines for his nebulous call.
Still, he maintained the thought process that if $1,200 is breached, BTC will start to experience a loss of its user base, even diehards. Bitlord, a “full-time” crypto enthusiast since 2012, claimed that Brandt made a chart depicting BTC heading to $50,000, but deleted it to run with the $4,000 narrative. Ethereum World News is unable to confirm if this is accurate, but this isn’t out of the realm of possibility. Some analysts have warned this market rebound could be what’s known as a “dead cat bounce” and markets, possibly including bitcoin and crypto, could soon fall back again. A dead cat bounce is also a pattern used for the stock market, where price fluctuations are driven by a much wider investor base.
A dead cat bounce can occur in any market, yet is a particularly prevalent phrase in equity markets. A dead cat bounce doesn’t apply to short term bursts of stronger gains for an otherwise strong stock. During a dead cat bounce, prices rally for a brief period of time then resume a consistent downward trend. Like other blockchains, Ethereum has a native cryptocurrency called Ether (ETH).ETH is digital money. It is purely digital, and can be sent to anyone anywhere in the world instantly.
The bearish scenario for Bitcoin
The only difference between a bounce and a rally is when the stock turns around and comes back down to earth. Typically the only way to determine this in advance is by studying the fundamentals of the underlying asset (the company in the case of a stock). Now, many months later, Brandt has another prediction for the cryptocurrency market, specifically pertaining to Bitcoin. Speaking with Yahoo Finance, the current CEO of Factor LLC, noted that he doesn’t expect BTC to go “anywhere,” explaining that at best. At the time, in a tweet that has since garnered 3,300 likes, the chartist explained that after a parabolic advance in markets, an 80%+ decline in value is expected to occur.