Altcoins saw an emergency rebound on May 13 as the initial panic sparked by the sale of Bitcoin Terra’s UST collapse and multiple stalemates losing their dollar peg begin to decline and risk loving traders looking to get trading assets at annual lows.
Despite the major correction that took place over the past week, Bitcoin (BTC) bulls have managed to return to the $ 30,000 zone, a level that has been defended several times during the 2021 bull market.
Here’s a look at what several analysts have to say about the outlook for Bitcoin advance as the price tries to recover in the face of multiple breaches.
Is a short press waiting?
News of the minds of derivative traders has been provided by a cryptocurrency analytics platform Coinalyzewhich evaluated Bitcoin long to short positions for perpetual BTC / USD contracts on ByBit.
As shown in the lower half of the chart above, interest in shorts, which is represented in red, has risen during the recent market downturn indicating that derivatives traders expected more deterioration soon.
“The sentiment has been very negative over the last few days, as seen in ByBit long / short ratio and financial index. A short pressure / rebound is expected,” Coinalyze founder Gabriel Dodan told Cointelegraph in private comments.
A short-term break of $ 35K is expected
Bitcoin’s drop to $ 26,716 on May 12 was notable as it broke below the May 2021 low of $ 28,600, “which was seen as the last man standing for BTC” according to David Lifchitz, managing partner and chief investment officer at ExoAlpha.
In Lifchitz’s view, the rebound seen on May 13 was expected because “a lot of bad news has been removed” while the “panic move of the UST failure has already taken place.”
Bitcoin sitting at the May 2021 low “seems like a good entry point here with a tight stop if the debugging continues” according to Lifchitz, but traders should not expect a return to $ 60,000 to happen overnight and should instead set a more modest short term. $ 35,000 target.
“Long at $ 28.5K / Stop at $ 26.5K / Profit Target at $ 34.5K = $ 6K up / $ 2K low = 3/1 profit / loss ratio and from an investment standpoint, it looks compelling to me.”
Related: Buy the soak, or wait for maximum pain? Analysts are debating whether the price of Bitcoin has fallen
A V-shaped recovery is unlikely
News of what it would take for Bitcoin to regain its bullish momentum was provided by market analyst and pseudonymous Twitter user ‘Rekt Capital’, who posted 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.”
While many optimistic traders are hoping for a speedy recovery from this latest decline, Rekt Capital warned that “by historical standards, a sharp V-Shape recovery to mark a generation bottom line is less likely.”
The analyst said,
“Many are expecting one, as the previous March 2020 BTC bear market bottom was very volatile. But the macro-price history suggests that extended intervals are more likely.”
The overall market cap of cryptocurrency now stands at $ 1.287 billion and the dominance of Bitcoin is 44.4%.
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