For investors, there was something to cheer about on Sunday, after a notable rally by Bitcoin (BTC) and Ethereum (ETH) saw their prices surpass the $20,000 and $1,000 marks respectively. This was after a weekend of losses like never before. However, the coast may not be clear still, at least, not yet.
BTC had reached its lowest point of $17,772 on Saturday, before rallying over 15% to $20, 683 – its highest for Sunday. Although BTC has corrected a little since then, as of writing, it still trades at $20,117, per CoinMarketCap data. ETH also made a remarkable recovery from Saturday’s $898 low, surging by over 25% on Sunday. And at the time of writing, ETH has also corrected a little, trading at $1,081.
Meanwhile, the surge has brought about untold relief to investors, following a week of crypto bloodbath. Recall the position of experts when both top coins (BTC and ETH) fell below $20,000 and $1,000 on Saturday. Many felt that there could be a resultant wave of forced liquidations, with institutional investors in both cryptocurrencies being forced to pull out of their positions on BTC and ETH derivative products. And that would be understandable because prices would be too low to generate enough collateral. In fact, the projection was that the prices of BTC and ETH may be forced to go even more under. And as a result, causing more liquidations, albeit in a rippling style.
Is the worst over for Bitcoin and the rest of the coins?
Perhaps not. Although expectedly, this recovery would stop the massive selloff that analysts have said could send BTC price to as low as $13,800. Nonetheless, however, the recovery could as well just be a “dead cat bounce” as popular economist Paul Krugman has said in a recent tweet.
It is certainly not unusual for crypto to see short-lived rallies during bear markets before the downward trajectory resumes. In fact, it is typical.
Therefore, at best, the severity and the extent of the crypto bear market remain unclear.