A dead cat bounce is a really beneficial market jargon to know– after all, it is a rather typical occurrence, specifically in the crypto market.
Meaning of Dead Cat Bounce
< img src=" https://changelly.com/blog/wp-content/uploads/2022/02/wrw4g14hf6l51-scaled.jpg "alt=" dead feline bounce"class=" wp-image-70043 "width ="366"height =" 366 "srcset= "https://changelly.com/blog/wp-content/uploads/2022/02/wrw4g14hf6l51-scaled.jpg 2560w, https://changelly.com/blog/wp-content/uploads/2022/02/wrw4g14hf6l51-770x770.jpg 770w, https://changelly.com/blog/wp-content/uploads/2022/02/wrw4g14hf6l51-1536x1536.jpg 1536w, https://changelly.com/blog/wp-content/uploads/2022/02/wrw4g14hf6l51-2048x2048.jpg 2048w "sizes="(max-width: 366px) 100vw, 366px"/ > A dead cat bounce refers to a short-term price recovery of an asset that has been in decline for quite a while. It is defined by a brief nature and always followed by a continued down pattern. Its name comes from the stating,”
even a dead cat will bounce if it falls from a fantastic height.” Technical Analysis A dead feline bounce is a pattern that is actually helpful in the technical analysis of both crypto and stock prices. It reveals a short-term healing of a bearish possession that is followed by additional decline.
Example of a Dead Cat Bounce
The dead feline bounces on a regular basis in the crypto market, so there are a great deal of examples of this phenomenon. Here’s an example that happened in January 2022: the BTC rate was clearly in decline, and we were in the middle (or at the start, depending on whom you ask) of a bear market.
Bitcoin’s rate briefly went up to $43K, however rather of a step en path to healing, it turned out to be a dead feline bounce: BTC promptly returned to losing its worth, going down to as low as $33K.