Bitcoin (BTC) bounced back to $30,500 on May 17 on hopes that a retest of 2017 highs could be avoided.
BTC/USD 1 Hour Candlestick Chart (Bitstamp).
$20,000 retest ‘highly unlikely’
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD rising after the daily close to tentatively build to $30,000.
However, in a multi-day range, the pair has yet to decide on a major uptrend or downtrend as volatility eases into the new week.
Facing fears that a major retracement could take it below last week’s 10-month lows, popular analyst Credible Crypto offered a more bullish alternative. Based on historical norms, he argued on Twitter that Bitcoin had little push to retest $20,000 or less.
“The argument for $13,000-14,000 BTC on the premise that past major bear markets have resulted in an 80% drop from the top allows for an important assumption that 65,000 was the cycle top,” he wrote.
“It’s the same assumption people made on June 21 at 30k before we surged to a new ATH of 65k 3 months later.”
As Cointelegraph recently reported, contingency plans for such an event already appear to be in place, with MicroStrategy — the company with the largest BTC corporate treasury — even poised to buy up supplies to stem the drop.
When asked if BTC/USD could repeat the retracement from its 2019 highs of $14,000 to the bottom of $3,600 during the March 2020 COVID-19 crash, Credible Crypto was just as skeptical.
“Not expected. Is it possible? Yes, but as I said, a retest of previous cycle tops has never happened – so I think it’s highly unlikely,” he said answered.
For Cointelegraph contributor Michaël van de Poppe, it was about the US dollar cooling its bull run against other fiat currencies to give risky assets some breathing room.
The US dollar index (DXY), he forecast, should fall from a 20-year high of 105 points.
“Looking at the current state of $DXY, I think we will see this scenario through. Assuming we will see a corrective move, the highs have been swept for liquidity. A loss of 103.7 points and I think we’ll get more downside pressure here -> risky assets rise,” he tweeted on May 16th.
Sentiment reflects the aftermath of March 2020
Market sentiment data, meanwhile, reflected the majority consensus on crypto – that anything could happen now, with the bias firmly to the downside.
The Crypto Fear & Greed Index, a cross-market sentiment indicator, hit 8/100 on May 17, its lowest reading since March 28, 2020 — two weeks after the coronavirus lockdown-induced meltdown.
Then as now, BTC/USD was already recovering from its lows. At $30,500, the pair is up 28% over the previous week.
Crypto Fear & Greed Index (Screenshot). Source: Alternative.me
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Source: TradingView