After the crash of crypto markets to 2020, Bitcoin has seen price relief in shorter time frames. The cryptocurrency fell to $17,500 yearly, 75% less than its high point, while Ethereum dropped to $870, an 82% decrease from its high.
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The standard number for crypto bear markets is this. Bitcoin has been known to experience similar crashes in its past. This could indicate that it is now entering a new cycle. Bitcoin currently trades at $21,300 and has made a profit of 4.4% over the last 24 hour.
In a market update, trading desk QCP Capital providedPotential scenarios for Bitcoin after a crash. The firm expects a potential continuation for BTC’s price as it makes it climbs its way to previous levels.
Despite the downside trend, QCP Capital claims BTC’s price saw a positive reaction from the lows as it quickly managed to get above $20,000. In that sense, they believe the selling pressure that took BTC to $17,000 was “less leveraged liquidations and more miners reducing inventory”.
Price consolidation is often a result of liquidation in leveraged positions, as assets can take some time to recover. In other words, BTC’s price is likely to continue up and less likely to stay in a specific price area, as it did in the past month when it was stuck at $28,600 and $31,500.
QCP Capital also believes that the options market may be showing less fear. Institutions are “stating to put on bullish structures in size”, the trading firm claimed while adding the following:
Support is also provided by macro-factors. Oil prices are down from above 123 and below 110. Similar trends have been seen in other commodities. It is important because it lowers inflationary pressure and allows the Fed to relax their tightening. All markets will benefit from this positive move.
It’s Time to Buy the Bitcoin Dip
NewsBTC reports that a drop in commodities prices could indicate that the U.S. Federal Reserve and its monetary policies are having an effect on global markets. This will reduce inflation, and give Bitcoin and other risky assets some breathing space, at least in the short-term.
TA: Bitcoin Consolidates Near Key Juncture, Can The Bulls Make It| TA: Bitcoin Consolidates Near Key Juncture, Can The Bulls Make It
Bitcoin’s value is often attractive after a crash of 75%. This makes it an appealing option to grow your long-term hold. But investors need to be careful and employ a dollar-cost average strategy (DCA). QCP Capital is adding this:
We are still vigilant. The possibility of additional crypto insolvencies and quarter-end fund redeems will put pressure on the prices.
