Analysts Warn: High Risks and Persisting Bearish Views Shadow Market’s Tentative Recovery

Golden bull and bear standing near generic Bitcoin cryptocurrencies. Stock charts in the background. 3D illustration.
  • Swissblock analysts suggest a potential shift to a bullish Bitcoin scenario amid USD decline, but caution that bearish risks persist. 
  • The US Dollar Index’s drop influences Bitcoin’s performance, with no rate cuts expected soon, tempering BTC gains. 
  • Fellow Swissblock analyst Henrik Zeberg warns of a possible severe market crash akin to 1929, predicting a market top within four months before the downturn.

Swissblock analysts wrote that the Bitcoin rebound over the weekend indicates a shift towards a more bullish scenario, fuelled by a drop in the value of the USD. But don’t get too excited yet, they warn the bears are hanging around for a little longer, while ‘risk signals remain high’.

While bulls and bears are fighting it out, many long positions were liquidated and perpetual markets experienced a slowdown the analysts report.

The US Federal Reserve not showing any indication of rate cuts anytime soon has dampened BTC gains further, Swissblock said.

Related: Satoshi-Era Wallet Awakens After a Decade, While BTC Surpasses 1 Billion Transactions


Breaking Through Vital Resistance Level Could Forecast Move to $70K

Market risk remains high while price momentum and onchain fundamentals continue a bearish path, as the Swissblock Speedometers show.

Speedometers indicating market sentiment, risk signal and onchain fundamentals, source Swissblock

The analysts expect that, if Bitcoin consolidates in the existing range, a breakthrough past the US$65K (AU$98K) resistance could soon spell a US$70K (AU$105K) price level.

Dollar Index Struggles with Downward Trend

The US Dollar Index (DXY) meanwhile, has fallen for four consecutive sessions, largely due to a weaker-than-expected US jobs report and recent remarks by Federal Reserve Chair Jerome Powell.

Despite the US Dollar’s recent gains against other currencies, Swissblock says the decline is expected to continue if economic data supports this trend and unless Federal Reserve officials diverge from Powell’s views.

Although the labour market is softening, hawkish voices within the Fed advocate for maintaining higher interest rates, which could influence the dollar’s future movement, the analysts added.

Zeberg Predicts Market Top Within 4 Months, Expects 1929 Style Crash

Some analysts fear that things may get a lot worse from here. Like macro economist and fellow Swissblock analyst Henrik Zeberg who has recently issued a warning to investors about a potential major market crash, similar to that in 1929 – the crash that led to the Great Depression and significant US financial reforms, including the creation of the SEC.

Given the historical severity of that event, Zeberg’s comparison suggests that investors should seriously consider the risk of a similar downturn.

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In a recent post he reiterated that sentiment – but first he believes we will see a market top by August or September.

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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