The cryptocurrency market has witnessed a slight rebound, with Bitcoin (BTC) experiencing an increase of over 1.8% within the last 24 hours. This uptick has seen Bitcoin rise, along with many of the top 20 cryptocurrencies, but experts are cautioning that this recovery may simply reflect a classic dead cat bounce—a short-lived price increase during a prevailing downtrend.
Recent data from BeInCrypto indicates that Bitcoin peaked at $89,000 on Monday, following a recovery over the weekend. At the time of this report, its price had adjusted to $87,755, marking a modest gain of 0.23% in the last day. Despite this apparent recovery, technical analysts remain skeptical.
Crypto analyst Elja has scrutinized Bitcoin”s technical setup following a drop to $82,000. He emphasized that short-term recoveries after significant declines can mislead traders into believing a bull market is imminent. According to Elja, the $98,000 mark has emerged as a crucial level for Bitcoin”s immediate trajectory. “After a major drop, you often see a quick relief rally, like a “dead cat bounce,” and this doesn”t mean the bull market will immediately return. Keep an eye on the $98,000 level. It used to be support and could now turn into resistance,” he stated.
Elja also cautioned that if Bitcoin fails to close above $98,000, it could confirm a bearish trend, potentially pushing the price down toward the $75,000 support zone. Conversely, a weekly candle closing above $98,000 could contradict the dead cat bounce narrative and indicate a resurgence of bullish momentum.
Market analyst Ted Pillows described the latest price increase as a “relief bounce” rather than a significant shift in market sentiment. He pointed out that such brief rebounds tend to inspire renewed optimism among traders; however, this optimism often dissipates rapidly in a persistently negative market environment. Pillows reiterated that the overall trend continues to suggest a downward movement.
Commentator Titan of Crypto noted a strong reaction from Bitcoin at the Senkou Span B, the lower boundary of the bullish Ichimoku Kumo cloud. He warned that even if a rise occurs, it is “likely to be a dead cat bounce,” echoing patterns observed in 2022. Titan added that the bearish outlook would only be invalidated if Bitcoin completely reclaims the cloud and maintains its position above it.
Another analyst pointed out the emergence of a potential head-and-shoulders pattern on Bitcoin”s monthly chart, a classic bearish formation that could signal trend exhaustion and a deeper reversal if the neckline breaks. Despite these warnings, some analysts like Peter Anthony argue that traders may continue to categorize every rebound as a “dead cat bounce,” even as Bitcoin approaches the $100,000 mark. He acknowledged the likelihood of a correction as Bitcoin moves back toward its highs but believes that bearish predictions may ultimately prove to be unfounded.
In conclusion, the coming weeks will be pivotal for Bitcoin”s market direction. The question remains whether the cryptocurrency will continue to rise or experience further declines.
