A closely tracked economist and trader is unveiling two conditions that he believes could strengthen the case of a Bitcoin (BTC) bottom at $30,000.
Alex Krüger tells his 128,600 Twitter followers that $30,000, a key psychological level for the top crypto asset by market cap, is starting to look like the bottom of its downtrend.
“Good odds that [it] was the bottom for a long while. $30,000 tapped and defended.”
However, Krüger says that two crucial developments must happen to decrease the odds of another sell-off event.
“For that, we will need two conditions:
#1 weak CPI [consumer price index] number on Wednesday
#2 LUNA systemic risk addressed pronto.”
For the second condition, Krüger is referring to the plunging value of TerraUSD (UST), a stablecoin designed to be pegged to the US dollar. This week, the value of UST crashed to as low as $0.69 before slightly recovering to its current value of $0.83.
The economist calls the collapse of UST a systemic risk because the value of the stablecoin is tied to Bitcoin (BTC) and decentralized finance payment network Terra (LUNA).
Over the last few months, the Luna Foundation Guard (LFG), a non-profit organization built to support the Terra ecosystem, accumulated more than $1.6 billion worth of Bitcoin in order to back UST. BitInfoCharts shows that the LFG has recently emptied the content of its BTC wallet.
Even if these conditions are satisfied, Krüger highlights that a BTC bottom does not guarantee the start of a new bull run.
“*Long time* here is weeks, maybe all of May, or BTC $35,000-$36,000. The dominant themes remain: hawkish Fed and following stocks. Check the volume on the daily (zoom in on your chart). Such outsized volume is generally observed at bottoms.”
At time of writing, Bitcoin is valued at $31,088, up nearly 4% in the last 24 hours.
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Featured Image: Amelia Murphy/Shutterstock/Natalia Siiatovskaia
