After spending most of the weekend below the $30,000 level, Bitcoin recovered to $30,450 on Monday morning in Asia.
The bounce-back of Bitcoin
As per Bloomberg data, the largest cryptocurrency rose by 1. 8% on Monday after it fell for seven straight weeks, losing in the longest streak since August 2011. This decline echoed the S&P 500 decline for seven weeks.
Mark Newton, a technical strategist at Fundstrat Global, said that if the S&P 500 falls more, one final flush will create a buying opportunity for Bitcoin. The market is still bearish and will approach a time for buying in the next couple of months.
In the last few weeks, Bitcoin has struggled even as Federal Reserve hiked interest rates to curb inflation which remains high, boosting the prospects of more money tightening policies. Bitcoin was touted as a token that would hedge against inflation. Still, recent months have proved that they correlate with risk assets such as stocks in the Nasdaq 100 index that had tumbled after the regime change.
On Friday, Konrad Laesser and Noella Acheson of Genesis Global Trading observed that Bitcoin is most likely to trade in the range of $29000 to $31,000 for the next couple of weeks. They added that releasing some economic data, such as inflation measures and US Gross Domestic Product, may change the narrative.
Rock Bensignor, a former Morgan Stanley strategist and current president of Bensignor Investment Strategies, uses DeMark technical indicators to compare the minimum and maximum prices to the equivalent price in the previous period to measure demand and has argued that Bitcoin will not break out to a higher level anytime soon.
On Monday, Bensigor said that he expects another four weeks of heaviness. The low of $25,425 on May 12 and the subsequent bounce back keeps the support level intact at $28,900.
