Is Bitcoin’s rapid move to $ 49,000 a dead cat leap or the road to $ 100,000?

Bitcoin opened the fourth quarter very positively with a retest of $ 49,000 when the “October Bulls” started. The # 1 coin has rebounded around 18% in less than a week, and the crypto market has sent a strong uptrend signal. Those gains paved the way for on-chain indicators to improve and the broader market saw a return to momentum.

BTC price 4-hour chart | Source: Tradingview

At the time of writing, Bitcoin is up more than 10% in the past two days and is trading near $ 47,700. However, with the price currently facing strong resistance at $ 48,500, many speculate that such a sudden upward move is a dead hop, resulting in a bearish forecast for the leading coin.

Nice rest dead cat jumps?

The term dead cat bounce in finance is used to describe a short-term recovery move after a prolonged decline. Initially, the price rebounded in a small rally that resembled an ongoing trend reversal, but then fell again quickly.

In the case of Bitcoin, the dead cat bounce theory occurs when the price quickly recovers from the September losses on the first day of October.

Interestingly, according to a post by CryptoQuant, BTC has seen a dead cat pop open many times in the past. A closer look at the net outflow of BTC over past cycles shows that such bounces draw a certain pattern.

The net flow on the exchange measures the difference between the occurring inflow and outflow. Negative value if the output current is dominant and vice versa. Against this background, negative values ​​continue to indicate buying pressure and generally bullish.

However, the flow value on the stock exchange that precedes or coincides with the formation of the dead hop is very positive. This trend was noted in 2017, 2018, and then 2019 when the entry line dominated BTC’s chart.

current flows on the floor Transaction | The source: KryptoQuant

This year, too, the peak that formed after the ATH in May was actually a dead cat bounce, which was confirmed by positive net flow values. This time, however, the net outflow is negative and the trend is similar to that of the 2017 cycle as dominant outflows and negative net outflows drive prices up. Hence, it seems that the dead cat bounce theory is incorrect at the moment given the current negative net flows.

The only newspaper shows healthy outlook

With outflows continuing to prevail and long-term holders absorbing more BTC, highlighting a replenishment trend, Bitcoin’s supply-demand curve suggests a bullish outlook. However, given the low volume of trade in both the spot market and the options market, there is considerable skepticism about BTC’s ability to bounce back from $ 49,000.

Profit / Loss Supply for Long and Short Holders | The source: Glass knot

However, the large number of BTC longs forecasting prices as high as $ 100,000 on October 2nd is a sign that long-term expectations are very positive. With the Bitcoin price candle turning green, the environment looks favorable for the early phase of the rally. The last quarter of the year seems to be quite interesting for BTC and market participants shouldn’t miss it.

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