Bitcoin (BTC) returned to $30,500 on May 17, hoping to avoid a retest of the 2017 highs.
BTC/USD 1-hour candle chart (Bitstamp) Source: TradingView
Retest of $20,000 'highly unlikely'
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing after the daily close, temporarily above $30,000.
Still, on a multi-day range, BTC has yet to decide on an upward or downward trajectory, while volatility has subsided in the new week.
Popular analyst Credible Crypto offered a more bullish option amid concerns that a sharp pullback could take it below last week's 10-month low. He argued on Twitter that Bitcoin has little incentive to retest $20,000 or lower based on historical norms.
“The $13K-14K argument is a major assumption given that the past bear market resulted in an 80% drop from the top – $65K is the cycle top.
"This is the same as people expected at $30k in June '21, and 3 months later our ATH is back at $65k."
As Cointelegraph recently reported, contingency plans for such events appear to be in place, with MicroStrategy even preparing to buy Bitcoin to stem the fall.
Credible Crypto was similarly skeptical when asked if BTC/USD would repeat its pullback from its 2019 high of nearly $14,000 to its March 2020 bottom during the COVID-19 crash of $3,600.
“No. Is it possible? Yes, but as I’ve said before, a retest of previous cycle highs has never happened before — so I think it’s very unlikely,” he responded.
For Cointelegraph contributor Michaël van de Poppe, the question is whether the dollar's bullishness against other fiat currencies will cool off in order to give risk assets some breathing room.
He predicts that the U.S. dollar index (DXY) should pull back from a 20-year high of 105.
US Dollar Index (DXY) 1-Day Candlestick Source: TradingView
"If I look at the current state of $DXY, I think we're going to follow that. Assuming we're going to see some corrective action, the highs have been swept by liquidity. Down 103.7 points, I think we're headed for a bigger Downside pressure --> risk assets up," he tweeted on May 16.
Market sentiment similar to March 2020 fallout
Meanwhile, market sentiment data reflects the majority consensus in the crypto space — anything can happen now, with the bias firmly tilted to the downside.
The cross-market sentiment gauge, the Crypto Fear and Greed Index, hit 8/100 on May 17, its lowest level since March 28, 2020, two weeks after the coronavirus lockdown-induced crash.
Then, as now, BTC/USD has recovered from its lows. The price was $30,500, up 28% from the previous week.
Crypto Fear and Greed Index (screenshot) Source: Alternative.me
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