In short, the temporary recovery of an asset that has been on a decline for a while is termed as a 'dead cat bounce'. The fleeting recovery will further lead to a reduction in the value of cryptocurrency. If you’re new to crypto, then you can fall prey to Dead Cat Bounce. So, it’s essential that you study the market.
Dead Cat Bounce generally takes place when a large number of bearish traders square off their short positions. A Dead Cat Bounce generally follows a continuous pattern, making it easier to figure out. After the brief recovery, the price takes the course of its long-term direction. So, if you think that the asset’s price may likely fall in the future, then it’s definitely Dead Cat Bounce.