The Bitcoin price has bounced back in the past three straight days as the VIX index and the fear and greed index retreat. The BTC is trading at $57,410, which is about 7.40% above the lowest level this month. Other coins like Solana, Ethereum, Gala, Sandbox, and Decentraland have all risen. Subsequently, the total market capitalization of cryptocurrencies has jumped to more than $2.7 trillion.
Fear is easing
The BTC price crashed hard on Friday as investors remained concerned about the new Covid-19 variant known as Omicron. The coin tumbled to a multi-month low of $52,700, which was about 22.50% below the year-to-date high of $68,819.
Bitcoin was not the only cryptocurrency in the red last Friday. The Dow Jones index experienced its biggest drop this year as it fell by more than 900 points. The S&P 500 and Nasdaq 100 indices dropped by more than 2%.
A reversal of this price action has happened on Monday as worries of the new variant of the virus have eased. The CBOE volatility index (VIX), has tumbled by more than 11%. In the same period, the FTSE 100, CAC 40, and DAX index have risen by more than 0.50%. In the United States, futures tied to the Dow Jones and Nasdaq 100 indices have risen by more than 100 points.
This rebound is likely because analysts believe that the sell-off experienced on Friday was unwarranted. Besides, countries are now more prepared to handle the new variant of the virus. Besides, stocks and Bitcoin prices have done well amid the Delta variant.
Another reason why Bitcoin price is rebounding is that analysts believe that the new variant will lead to more dovish Federal Reserve and other central banks.
Bitcoin price prediction
The daily chart shows that the Bitcoin price has struggled in the past few days. The coin is trading at $57,410, which was slightly above the key support at $53,720. This price is slightly above the double-top pattern.
Notably, the coin has moved below the 25-day and 50-day exponential moving averages (EMA). Notably, the two moving averages have formed a bearish crossover. It has also formed a break and retest pattern.
This price action signals that this rebound could be part of a dead cat bounce. As a result, there is a likelihood that the coin will resume the downward trend in the coming days.
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