Crypto Markets Rally, Provide Temporary Relief
Crypto markets rebounded after suffering heavy losses over the past few days. Read the following for more information.
Crypto markets finally rebounded going into Friday, having suffered one of the most horrific patches in recent memory.
Although altcoin losses of over 50% in a week will not be recouped quickly, Bitcoin rallied back above $30,000 — providing the springboard for a strong altcoin bounce.
Layer-ones like Cardano (ADA) (up 23% over the last 24 hours at the time of writing) and Polkadot (DOT) (up 34%) saw the biggest gains among the top cryptocurrencies.
Bitcoin and Ether are up close to 7% after the fallout from the UST/LUNA collapse wiped out virtually all gains from 2021.
On-chain data that indicates declining BTC balances on exchanges, suggesting traders are happy to take their coins off-chain (where they cannot be sold). Bitcoin remained in the “Extreme Fear” zone of the Fear and Greed Index.
Is the Crypto Slide over?
Traders are now wondering whether “the bottom is in” or whether more pain has just been delayed.
With LUNA at virtually zero, one systemic risk factor has been taken out for Bitcoin — but macro concerns remain. A higher-than-expected Consumer Price Index print for April suggested that while having peaked, inflation is bound to stick around for longer. That is bad news for risk assets like Bitcoin, which could shed more value as investors with decreasing risk appetites rush into bonds.
Arthur Hayes, one of the crypto industry’s most respected figureheads, has lowered his price target for BTC and ETH to $20,000 and $1,300, respectively. Similarly, analysts believe that a classic 80% drawdown from all-time highs (as happened during the previous bear market) will take Bitcoin down to $14,000.
Traders can take a sigh of relief, but it seems they have no time to do so yet.