Dead Cat Bounce.
This week, BTC made it to a new all-time high, which made me think about the bearishness of some of the market’s participants. Also, I started to think about caution vs. bearishness.
I haven’t personally encountered many people who short the market, but given short squeezes, there are quite a few. And for a good reason: one of the most-followed people in the industry is Peter Brandt, who famously shorted crypto down from its 2017 top.
People don’t want to be suckers and buy the top, so why not try to profit off that if you think the market is weak?
Look at the timestamp. What a legend.
After BTC reached its first ATH above $60,000 in April 2021, declined, and then started to rise again, the popular narrative in the space has been that it’s just a so-called “dead cat bounce.” It’s a common Technical Analysis pattern, which means that the market merely corrects to the upside while already being in the bearish mode.
A simplified explanation of the “dead cat bounce.” Source: YouTube.
There’s a reason for such concerns. I remember looking at the 2018 BTC dead cat bounce in real-time. Back then, I wasn’t experienced and thought that the market was going to recover. However, those who had the bearish outlook were right.
BTC Price. Source: CoinGecko.
People who experienced the 2018 bear market may be spooked by the potential of another “dead cat bounce.” Moreover, they may try to front-run such a pattern and short the market.
However, it becomes increasingly evident that we’re not dealing with the “dead cat bounce,” at least at this stage. The first signal was that the market was up-trending for quite some time. If you look at the chart above, the 2018 “dead cat bounce” took only a couple of weeks, while this time, the market has been growing for three months already.
Now that BTC broke its ATH, the “dead cat bounce” narrative seems even weaker. I wouldn’t say that it’s “up only” from this point, but a bear market is less likely than the bull trend or at least sideways.
One day, the shorters will be right and have their moment of triumph. But that moment doesn’t seem to be too close.
SIMETRI Portfolio–Alt Thaw
BTC will likely keep the market’s spotlight in the coming weeks after reaching a new all-time high. However, during periods when it consolidates or moves sideways, liquidity will likely flow back into altcoins.
That’s reflected in the SIMETRI Portfolio performance. It bumped to almost 3,000%, but there’s still a lot of potential given that some of the projects are still in the red.
The real alt season hasn’t started yet, but we’re ready to act when it does. Now, let’s look at the portfolio performance.
