Bitcoin touched $10,500 yesterday and bounced back with ferocity. At the time of writing this, Bitcoin is currently sitting at around $15,000. Is this Bitcoin recovery healthy? In my opinion, it isn't.
The reason I suspect this isn't a healthy recovery is simple - it happened too swiftly and too strongly. I believe, from a psychological perspective, that dead cat bounces occur because people FOMO into a recovery with little faith in the price of the underlying asset (Bitcoin in this case) which leads to a nice pump. But when selling occurs, everyone says to themselves "I knew I shouldn't have bought!" and they all panic for the exits.
As such, I will sell a decent portion of my Bitcoin if it reaches $17,000 as there is significant resistance at that level. The reason I'm not selling immediately is because Bitcoin continues to defy my expectations, generally to the upside, so I will give it an opportunity to rise higher. In the event it comes down prior to that level, I'm prepared to hold (or buy if it goes low enough).
In the event it skyrockets (say up to $30k), then I'll provide updates on my expectations and entries. But for now, these are my thoughts on the market. As for altcoins, I still prefer Bitcoin over them given dominance has reverted back to 43%. I will continue to generally prefer Bitcoin until dominance reaches around 50%, although I will provide an update if my mind changes on this for any reason. As such, I believe selectiveness is more important than ever with altcoins right now.
Let me know your thoughts on the markets below - I'm happy to hear them!