The current state of the cryptocurrency market is only suitable for traders who have a high demand for risk. But for the weak, analysts recommend being patient and cautious.
Bitcoin’s prospects are high (Bitcoin) And ether (ETH), the cryptocurrency with the highest market value is more or less the locomotive of the rest of the crypto market. According to data provided by Skew, as of Wednesday, the realized volatility of ETH/USD within a 30-day time frame is close to the peak level of 2017.
At the same time, ByBt.com showed that Bitcoin’s 30-day volatility rate is at an annual high, which indicates that the benchmark asset is still at risk of violent price fluctuations in the next few trading days. In short, the first two crypto assets show a higher probability of moving in either direction. All of this can cause huge gains and losses to day traders.
Buying in a falling market
The volatility alarm sounded when Bitcoin and Ethereum released an incredible recovery rebound after the recent price drop.In retrospect, the BTC/USD exchange rate plummeted by more than 50% after reaching nearly $65,000 in April-partly due to Elon Musk Anti-Bitcoin tweets and China’s encryption ban Reiterated last week.
Ethereum (Ethereum), its current positive correlation efficiency with Bitcoin Sit around 0.88Follow the bearish correction of the benchmark digital asset. The market value of the second largest cryptocurrency fell by as much as 60%, and the highest record since mid-April was $4,380.
But the bulls see an opportunity in the aforementioned price drop, which is enough to help the prices of Bitcoin and Ethereum recover from their local price bottoms to as much as 36.12% and 68.52%. Some analysts expect that, driven by supporting macroeconomic catalysts, the upward retracement will be further expanded, mainly due to concerns about inflation.
The person in charge’s technical bull Kathy Wood (Cathie Wood) Ark Investment Management, After the crash last week, reiterated its $500,000 bitcoin price target, calling the decline “a perfect time to buy.”
-Business Weekly (@BW) May 19, 2021
Nevertheless, many people also warn traders not to buy during the bearish correction phase, especially after a year of price increases, which increases the risk of long-term investor profit-taking. Analysts from BiotechValley Insights Consulting Group pointed out that even after the US consumer price index rose to 4.2%, Bitcoin still fell firmly, indicating that the cryptocurrency market is currently in an “anxious phase.”
“I believe Bitcoin has a long way to go,” one of the analysts at BiotechValley Write on the note. “I think it will slowly grind the slope of hope with the periodic dead cat bounce.”
“I think it will slowly grind the slope of hope with the periodic dead cat bounce.”
The organization called for Bitcoin’s price target to be set at $15,000-$16,000.
Low risk appetite?Wait
Independent market analyst Koroush AK Took a fairly intermediate approach. He suggested that traders wait for a clear rebound above short-term resistance before determining market bias. Excerpt from his tweet:
“After experiencing a market crash of more than 60%, I need to spend a small rebound to turn my bias back to bullish bullishness. Be cautious until we get $45,000 in BTC and $3,400 in ETH. [I] I will be patient here. You can make money without making money. “
This Recent rebound It coincides with the increase in the number of open positions in Bitcoin futures from 11 billion US dollars to 11.88 billion US dollars, which indicates that the leveraged position in the derivatives market is steadily rising. At the same time, since the price crash on May 19, long positions worth more than $12 billion have been liquidated.