Bitcoin has seen some gains on Friday, with BTC/USD adding 3.3% in the past 24 hours to break above $21,000 again. At the current price levels of $21,250, Bitcoin has in fact clawed back losses seen this week, and is trading about 4% higher on its weekly low.
The upside for BTC is also replicated across the altcoin market, with Ethereum up 8%, BNB 6%, XRP 13% and Solana 11% in the past 24 hours. The broader crypto market is largely green as shown by the heat map below.
Does this mean the pain is over? May be not, according to one analyst.
Bitcoin to see more pain yet, says pro
Stefan Rust, CEO of Laguna – the parent company of Truflation – says the market may yet see more pain before a bottom is in. He says markets in general may indeed be gearing for another leg down, given recent headlines from the Fed about inflation and the US, after all, unlikely to avoid recession.
The outlook presents a “more sticky and crippling situation”, he noted, with Bitcoin likely to face fresh selling pressure short term. This is moreso highlighted by this week’s dip below $20,000 after the bounce from lows of $17,600 hit resistance above $22,000.
He told Invezz in emailed comments:
Bitcoin’s retracement to below $20,000 on Wednesday shows there is still a lot more pain to come in the crypto markets, if not in all markets.”
Investors still highly leveraged
According to Rust, further downsides across the crypto market presents more risks for many projects.
After recent turmoil put some major players on the verge of collapse with massive liquidations, the Laguna chief thinks another dip across the market could topple “a very shaky House of Cards in many areas of cryptocurrency.”
As for what might happen next, Rust says many investors are still extremely leveraged, with a little tipping all it might take to spark margin calls. This would then lead to another leg of mass-selling, akin to what unfolded during Terra’s collapse.
The UST contagion is much at play and this suggests the market is “nowhere near the bottom,” he said.
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