The markets are echoing the feelings of panic that swept through cryptocurrency after COVID-19 hit. Conditions for Bitcoin versus USD look just like they did back then, with fear spreading quickly.
Bitcoin (BTC) is currently trading at $30,500 per coin after briefly dipping below that level earlier in May. The cryptocurrency has shown remarkable resilience following last week's bubble burst which caused significant losses for many investors around the world but it seems they're not quite ready to give up on this new hope just yet!
Data from TradingView showed that Bitcoin's price has been climbing steadily after trading close to $30k in recent days, with a new high expected by tentatively building on this number at the end of today's trading session.
Still, when considering multiple days, the pair had yet to decide on a meaningful upward or downward trajectory for their trades over the long term.
Despite worries that a major retracement could take it below last week's ten-month lows, popular analyst Credible Crypto offered an optimistic alternative. He further argued that the price of Bitcoin has little to no reason or motive in revisiting $20k, let alone lower than this figure.
According to him, the argument for $13K-14K BTC on the premise that past major bear markets have led to 80% declines from their highs makes an assumption, which is not confirmed by anything except guessing.
"Its the same thing people said at 30k back in June of 2021 before we rallied and hit a new ATH 65K three months later." He said
Recently reported that companies are prepared for the possibility and they have even started preparing their contingency plans. In response, MicroStrategy — which has large reserves in BTC— announced it will buy up any coins on supply if necessary to stop prices from dropping too far below what's considered fair market value.
Credible Crypto doesn't think it will repeat the same thing that happened in 2019 when prices hit near $14k to the $3,600 floor.
"Not expecting that. Is it possible? Yes, but as I've said previously a retest of prior cycle highs has never happened before- so I find it highly unlikely," he responded.
Crypto analyst Michaël van de Poppe, it was a question of whether or not the United States dollar would cool its bull run versus other fiat currencies in order to give risk assets some breathing space.
He forecasted that the USD index, which measures the value of US Dollars against other currencies, should come down from its twenty year highs of 105 points.
"If I look at the current state of the $DXY, I think we'll follow through with this scenario. Assuming we'll be seeing some corrective move, the highs have been swept for liquidity. Losing 103.7 points and I think we'll get more downwards pressure here -> risk-on assets up," he tweeted on May 16.
The crypto market was in an uncertain state, with the majority consensus across digital currencies reflecting that anything could happen. The market sentiment data is in tally this notion. In fact the bias is strongly towards a downside.
The Crypto Fear and Greed Index hit 8/100 on May 17, its lowest value since March 28 2020- two weeks after the Coronavirus lockdown caused it to plummet.
At the time of writing this, BTC/USD is already recovering from its low. It is currently at $30,500 which is a massive 28% improvement from it's value earlier this week.