Markets rallied after suffering brutal losses in the last days.
Crypto markets finally bounced going into Friday, having suffered one of the direst patches in recent memory.
Although altcoin losses of over 50% in a week will not be recouped quickly, Bitcoin rallied back above $30,000 — providing the springboard for a strong altcoin bounce.
Layer-ones like Cardano (ADA) (up 23% over the last 24 hours at the time of writing) and Polkadot (DOT) (up 34%) saw the biggest gains among the top cryptocurrencies.
Bitcoin and Ether are up close to 7% after the fallout from the UST/LUNA collapse wiped out virtually all gains from 2021.
Cointelegraph reports on-chain data that indicates declining BTC balances on exchanges, suggesting traders are happy to take their coins off-chain (where they cannot be sold). Bitcoin remained in the "Extreme Fear" zone of the Fear and Greed Index.
A Local Bottom or Reversal Incoming?
Traders are now wondering whether "the bottom is in" or whether more pain has just been delayed.
With LUNA at virtually zero, one systemic risk factor has been taken out for Bitcoin — but macro concerns remain. A higher-than-expected Consumer Price Index print for April suggested that while having peaked, inflation is bound to stick around for longer. That is bad news for risk assets like Bitcoin, which could shed more value as investors with decreasing risk appetites rush into bonds.
Arthur Hayes, one of the most well-respected figureheads in the crypto industry, revised his price target for BTC and ETH down to $20,000 and $1,300, respectively. Similarly, analysts suggest that a classic 80% drawdown from its all-time high (as happened during previous bear markets) would take Bitcoin down to $14,000.
Traders can breathe a sigh of relief, but it seems they have no time to relax just yet.
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