08.12.202101:45 Forex-elemzések és áttekintések: Is Bitcoin waiting for a V-shaped recovery?

On Tuesday evening, Bitcoin looks technically very good, which is especially pleasing.

According to Santiment, analytical data on the main cryptocurrency show that the recovery, during which Bitcoin rose to $ 52,000 per coin, is associated with calls in social networks to "buy the dip."

Buy the dip or Dead cat bounce?

Details:

• Buy the dip - purchasing an asset after it has dropped in price
• Dead cat bounce - small, brief recovery in the declining price

Earlier, Bitcoin's daily recovery is 5.86%. And although this is very good after a 20% decline over the weekend, everything is not so technically clear: the price is again at a fork.

On Monday, two possible scenarios were discussed: a pullback to the area of $ 52,000 - $ 53,000 per coin and a breakdown of the support at $ 48,000. The first one was realized.

Now, there is a new fork, and it is more important this time since we are talking about breaking through the border separating the bear market from the bull market.

Here, two scenarios can also be considered: a decline and transition to lateral dynamics within the range of 48,000 - 52,000 dollars, or breakdown of the zone of 52,000 - 53,000 dollars and consolidate higher.

We can talk about a V-shaped recovery in the second case. But in the meantime, there is a risk that the current recovery will be a "dead cat bounce or a small, brief recovery in the declining price."

What caused the market to collapse?

Santiment reported that renewed fears related to the COVID-19 pandemic among larger market participants could be one of the reasons for the collapse of cryptocurrencies. Apparently, the broad market sell-off was caused by profit-taking by institutional market participants.

Reports show that institutions sold over $500 million worth of Bitcoin, which caused an "aggressive liquidation" in the crypto derivatives market, which led to a drop.

In addition, the company explained the large long shadow on the Saturday afternoon candle by the fact that a large number of users began to redeem this drop.

But what about the ambitious goals for Bitcoin's growth?

In November, JPMorgan analysts updated in their analytical review the Bitcoin price forecast by $146,000 per coin in the long term. These goals were calculated with the expectation that the volatility of the cryptocurrency would fall and institutional investors would prefer BTC instead of gold.

Then analysts led by Nikolaos Panigirtzoglou showed that they see Bitcoin as a scarce product that increasingly competes with gold for investors' preferences as a hedge against inflation. They argued that gold has not responded to increased concerns about inflation in recent weeks, which is at a 13-year peak in the United States and is rising sharply around the world.

New threats

However, another factor has appeared on the market. Rising inflation requires the Fed to tighten monetary policy. According to some experts, the curtailment of quantitative easing, the rise in the cost of money may become the external factor that will put pressure on risky assets, including cryptocurrencies.

Therefore, the expectation of hawkish actions from the Fed may not let Bitcoin go higher yet. This is one of the reasons why the well-known stock-to-flow (S2F) cryptanalyst PlanB model has stopped working.