While Bitcoin has started the new year with significant price growth, many experts are still not convinced that the digital currency market will continue its upward trajectory, at least in the short to medium term.
To the report Cointelegraph The dramatic growth in total market capitalization at the same time as the continued rise in the price of Bitcoin has prompted many analysts to consider whether the recent surge is the start of an uptrend or a bull trap.
Speaking to Cointelegraph on January 23, James Edwards, cryptocurrency analyst at Australian fintech company Finder, said the case for bull trap adoption is stronger and warned that the recent price increase could be short-lived.
He noted that at the same time as the price of Bitcoin increased over the weekend, the Nasdaq and S&P 500 stock indexes also experienced a similar upward trend.
This shows that price increases are not unique to the digital currency market; Instead, with the stoppage of inflation growth, it seems that the reason for the general prosperity of the markets is the return of interest in risk taking among investors. So Bitcoin has only benefited from the effects of positive sentiment emanating from elsewhere, and this trend is likely to be short-lived.
Edwards added that the digital currency market needs to clear major hurdles before starting a new uptrend. Among these problems, he mentioned the continued consequences of the fall of the FTX exchange and the bankruptcy filing by Genesis on January 19.
As such, we will see further market selling and shrinking as digital currency companies restructure their balance sheets and float their tokens to cover debt and stay afloat.
Mike McGlone, chief strategist at Bloomberg, told Cointelegraph that he is not sure about the continuation of Bitcoin’s price trend and pointed to macroeconomic recession-like conditions as a very big obstacle for Bitcoin to overcome the current conditions.
McGlone said this time:
With the world leaning towards recession and most central banks tightening their contractionary monetary policies, I think macroeconomic conditions will continue to be the main factor in determining the price of Bitcoin and digital currencies.
Some other analysts on Twitter have a similar view. Il Capo Of Crypto, a cryptocurrency analyst, told his 710,000 Twitter followers on January 21 that Bitcoin’s recent break through past resistances was the biggest bull trap he had ever seen.
All the while I’ve been checking charts and avoiding Twitter rants. The current pattern of price growth testing resistance levels on long-term timeframes… looks clearly manipulated without any real demand. Again, this is the biggest bull trap I have ever seen. They can’t trap me though.
Also read: What is Bull Trap?
However, market analysis platform IncomeSharks has a bullish outlook. By sharing a “Wall Street Cheat Sheet” chart on Jan. 22 to its more than 379,000 Twitter followers, the firm mocked traders who think Bitcoin’s recent price movements represent a bull trap.
Sam Agterberg, CEO and co-founder of the AI-powered trading bot CryptoSea, has also recently shared a flurry of positive sentiments about the price of Bitcoin with his 431,000 Twitter followers. has put One of these tweets suggested that a breakout of the bullish flag pattern on the 4-hour chart of Bitcoin could take the price to $25,000.
Meanwhile, others probably refrain from making such predictions due to the unpredictability of the digital currency market.
Currently, Bitcoin is hovering around $22,770 and the Fear and Greed Index is in the neutral range with a score of 50. Not long ago, the fear and greed index of Bitcoin jumped from the level of 31 (fear) on January 13 (December 23) and reached the level of 52 on January 15 (December 25).