- The crypto market is experiencing a bounce following Bitcoin’s collapse to $17,600 over the weekend
- A bounce is expected after such a collapse, but how high will it go?
- Bitcoin should reach around $30,000 before a further correction
The cryptocurrency market is bouncing after a huge collapse over the weekend, caused by institutions being liquidated and being forced to exit their positions. We know that this isn’t a bull market anymore, or even a mid-cycle correction, so where can we expect the train to stop?
45% Bounce Possible
Looking at the crypto market as a whole, there are two key levels we can took to in order to predict where the rebound might end:
This suggests that in a worst case scenario the market should rebound by 15% with the possibility of a 45% bounce if shorters allow it. This will present the last opportunity of getting out of positions towards the end of May, and it is one that you should take: given the fact that we’re in a bear market we will likely see something like the following playing out over the rest of the year:
The situation will be echoed if the total market cap hits the upper level of $1.25 trillion, with the only possibility of a very unlikely resumption of a bull market coming if $1.08 trillion is breached and held on a weekly level, and even then this would be considered a bull trap.
Bitcoin Could Hit $30,000 Before More Downside
So how does that translate to Bitcoin? With $20,000 proving critical support, at least for now, we can assume that this area forms a baseline for the next year or so while price gradually trends lower:
It is advisable then to exit all non-long-term positions when Bitcoin hits the $30,000 range, unless Bitcoin can close above it on a weekly level. However, every aspect of the macro environment suggests risk-on assets are in for further pain throughout 2023, meaning that this is heavily unlikely.
