Bitcoin (BTC) seems to be arousing some confidence among its traders after the cryptocurrency recently rallied above $30,000.
But Analysts are cautious about the recovery’s nature, with many warning that it could be a “dead cat bounce.”
Bitcoin is currently trading at $31,500, up roughly 7% in the last three days. While it has recovered above $30,000, popular Twitter analyst @CryptoDonAlt believes that it needs to confirm at least two more levels for a breakout.
Until the token has more than halved from a record high hit last year, sentiment is likely to stay bearish.
BTC must first confirm $31,800 before moving on to $34,000
CryptoDonAlt said in a Tweet that the token has struggled to confirm $31,800, and is now “bearishly retesting” the same area. While the token has recently traded as high as $32,000, it has nearly immediately dropped below that level.
After clearing $31,800, BTC will face $34,000 as its next resistance point before a breakout. However, clearing this could set the token up for additional 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.
Bitcoin follows the stock market’s rise
A bulk of BTC’s recent gains have been driven by a strong recovery in stock markets. For example, the Nasdaq 100, BTC’s closest stock market counterpart, has risen 7% in the last five days, with a similar performance from the token.
However, U.S. stock futures indicate that the rise may be winding down, with Wall Street set for a largely flat open today.
As such, BTC’s recovery bounce may calm down similarly, keeping the token in a bearish trend for the short term.
The factors that contributed to the stock and cryptocurrency market’s downturn are still in play. This year, rising inflation and interest rates have stifled demand for risk-driven assets