The leading crypto started a rally today after the deep decline in recent days. Bitcoin recovered after slumping below $18,000 and the psychological level rose above $20,000. The Bitcoin community seems excited about the partial recovery of the leading cryptocurrency. However, Nobel Prize-winning economist Paul Krugman says it’s just a ‘flare’.
Paul Krugman: Bitcoin (BTC) modest rally “Dead Cat Leap”
As you can follow from the news of Kriptokoin.com, the crypto money market has suffered a lot in the last week. After days of red, today the leading crypto has made up for some of the market losses led by Bitcoin. At press time, the BTC price managed to rise above $20,000 again. It is unclear whether it will maintain this level. Because, according to some commentators, this movement represents a temporary revival.
One of those who think in this way is Nobel Prize-winning economist Paul Krugman. The famous economist also thinks that this rally is fake. Krugman identifies this price action of Bitcoin with what has been described as a ‘dead cat bounce’. Paul Krugman, in his comment on his Twitter account, uses the following expressions:
As of this morning, BTC is experiencing a modest rally. Probably just a dead crypto splash. But I still thought a little bit of history might be relevant. There are many interesting parallels between the dot-com bubble and crypto. But there are also contrasts. I will write more about all this soon.
Bitcoin’s market performance
As it is known, in bear markets, it is normal to see short-term gains for cryptocurrencies and other assets before prices continue their downward trend. Such situations are also interpreted as ‘dead cat splashes’. Not a sign of vitality, just a reactive act.
Bitcoin price hit $17,930 on the Bitstamp exchange on June 18, its lowest level since the beginning of December 2020. At the time of writing, it was trading at $20.561 according to CoinMarketCap data. This means a run of about 16% in the last 24 hours for Bitcoin. However, the leading crypto is 70% below its all-time high of $69k.
Bitcoin price daily chart / Source: CoinMarketCapAlthough Bitcoin is making its way into the green zone, some analysts still have a long way to go when considering the $100,000 targets. On the other hand, some analysts think similarly to Paul Krugman. Therefore, he predicts that BTC will plunge further. We will see in time who is right.
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