Crypto: recovery today after yesterday’s crash

A mini-crash occurred in the crypto markets yesterday, which today is followed by a partial recovery.

This dynamic was far from trivial, and it arose two days ago. It is well understood by analyzing the trend of the last three days in the prices of Ethereum and Bitcoin.

Today’s snapshot of the crypto market: Rebound of Ethereum after yesterday’s crash

It all started on April 25, when the small bleeding of ETH from staking ended.

This bleeding, albeit very small, had begun a few days after the release of ETH from staking due to the April 12 Shapella update.

In fact, on April 19th, when Binance enabled ETH withdrawals with stake, the price of Ethereum fell from $2,100 to $1,970, and then fell again to just above $1,800 on April 24th.

On the 25th, there was a reversal, with the price returning to $1,870.

However, yesterday, riding the wave of the small recovery on April 25, the price rose as high as $1,960 in just four and a half hours, but this rapid and significant growth proved unsustainable.

In fact, after that, in just 70 minutes, the price of ETH fell by almost 8%, returning for a very brief moment even below $1800.

This drop was also too big and fast to be sustainable, and then a further rally took place that brought the price back around $1,900.

At this point, this particular dynamic of excessive growth, followed by an excessive mini-crash and a further pullback, appears to be over.

Bitcoin’s mini-crash: the crypto queen seems to be making a comeback today

Truth be told, this dynamic is even sharper when analyzing the price of Bitcoin.

It is worth mentioning that until April 24th, it was most likely the price trend of ETH that influenced the crypto markets, but since the rally on April 25th, the price trend of BTC seems to have returned to prevail.

Before the rally on April 25, Bitcoin’s price was below $27,500. With that setback, it was back above $28,300, but yesterday in just four hours it jumped to over $30,000.

This is a very important threshold, both because it is the one whose crossing generated the 2023 peak in mid-April and because it is the one that characterized the brief moment of lateralization in May 2022 after the implosion of the Terra/Luna ecosystem, before the collapse due to of the Celsius bankruptcy.

Such a quick return above $30,000, after four days below $28,000, hardly seemed sustainable, and indeed yesterday, within just 50 minutes, the price briefly returned below $27,300 with a sudden mini-collapse.

But just as the surge above $30,000 appeared to be too sudden, to the point of being excessive, yesterday’s mini-crash also appeared to be excessive.

And then that was followed by a rally that brought the price back to where it probably should be at this point, which is around $29,000.

So after hitting annual highs well over $30,000 in mid-April, the price had fallen back to just over $27,000 due to Ethereum’s decline due to the sale of ETH being deducted from the stake.

This phase ended on April 25 with a setback that sparked a brief surge of enthusiasm that brought Bitcoin’s price back to $30,000 yesterday, but only for a brief moment. The excess of enthusiasm resulted in an exaggerated mini-collapse which within hours receded.

What to expect in the coming days

The first week of May can be decisive.

First and foremost, the staked ETH on Lido will also be unlocked, although to date it appears that Ethereum’s decline due to the unlocking of staked ETH is now behind us.

On Wednesday 3 May, the Fed will announce its new interest rate decision, although the market has largely already priced in another 25 basis points.

However, it is often the words spoken at a press conference that move the market rather than the eventual interest rate increase. Furthermore, it is also possible, at least in theory, that the Fed will always decide not to raise them.

Finally, it is important not to forget that if Bitcoin’s price trend in 2023 continues to behave in some ways similar to that of 2019, another small bull run can be expected in early May that could bring it back as high as $35,000.

Therefore, the current phase seems to be just a waiting phase for what will happen in early May, with an attempt to restore the annual records set in the middle of the month.

In short, a reverse bounce of sorts may be underway following the losses after April 19.

Yesterday, this reversal seemed to be complete, but the mini-collapse showed that the time is not yet ripe for a stable return above $30,000.

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