Bitcoin is likely not out of the woods until a definitive bottom formation has been and gone, multiple commentators say.
Bitcoin (BTC) continued its bounce from its 2021 opening price on Wednesday, hitting $31,600 in what some fear is just a temporary reprieve from the downside.
“Short the bounce?”
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it gained a respectable 7% during Wednesday.
Bulls had successfully defended the largest cryptocurrency against further losses at just above $29,000 — the price at which the market began the year.
As Cointelegraph reported, however, concern is running high over current strength being a “relief rally” — not a true comeback after a price floor.
“It’s still ‘short the bounce’ season,” popular analyst and podcast host Nebraskan Gooner summarized to Twitter followers.
Veteran trader Peter Brandt concurred, suggesting that Bitcoin would need another shock leg down before the genuine return to form kicked in.
l think your chart may be prophetic
— Peter Brandt (@PeterLBrandt) July 20, 2021
The latest spot volatility comes as Bitcoin network fundamentals delight market participants — these showing ever-increasing strength this month.
The hash rate was nearing 100 exahashes per second (EH/s) at the time of writing, edging closer to all-time highs of 168 EH/s from before the infamous China mining rout.
“Bitcoin network fundamentals have never looked better,” MicroStrategy CEO Michael Saylor declared Tuesday.
Difficulty, meanwhile, was still on track to increase at its next readjustment despite the price dip.
Dogecoin shines ahead of Musk conference date
In altcoins, a welcome reversal of fortunes was still in play — many of the top 50 cryptocurrencies by market capitalization saw daily gains of nearly 10%.
Related: Bitcoin bull outlines 7 steps to more fiscal stimulus and higher BTC prices
A standout was Dogecoin (DOGE), which put in 14% returns ahead of proponent Elon Musk’s discussion at Wednesday’s “The B Word” conference.
Crypto players more broadly will be watching for cues from the event, which features Musk in discussion with Ark CEO Cathie Wood and Jack Dorsey, CEO of Twitter and payment company Square.
