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Is the recent rise in the price of Bitcoin a bull trap? Analysts respond

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Although the price of Bitcoin started the new year with a strong growth, many analysts in the crypto space are still not convinced that the price of Bitcoin will continue its upward trajectory, at least in the short to medium term.

Bitcoin price crossed the $23,000 level on Saturday and recorded a local maximum of $23,362, according to Blockchain Homeland and quoted by Cointelegraph. However, the price of BTC experienced a slight correction on Sunday and fell to $22,314, and the weekly candle of the price of Bitcoin closed at the level of $22,717 at the end of Sunday. This price level is above most of the important long-term resistances on the Bitcoin price chart, such as the realized price and the 200-day simple moving average, but it is still far from the 200-week simple moving average, which shows the $24,739 level. has it.

Bitcoin price
Logarithmic chart of Bitcoin price in the weekly timeframe; Source: Trading View

However, the significant growth of the price of Bitcoin last month, at the beginning of which we experienced 14 consecutive days with a green candle in the daily chart, has caused many to question whether this price increase is a “bull trap” or indicates a change in trend. Is.

James Edwards, cryptocurrency analyst at Australian fintech firm Finder, said the case for a “bull trap” is now stronger and warned that the recent rally could be short-lived. He emphasized that the growth of the Bitcoin price was accompanied by the growth of the stock market and the NASDAQ Composite and S&P 500 indices, and added:

This suggests to me that the crypto rally is not unique and is part of an all-market rally due to better inflation numbers and increased risk appetite. Therefore, Bitcoin owes to the improvement of market sentiment, this growth will probably be short-term.

Edwards added that the cryptocurrency market still has significant hurdles to overcome to start a new bull market.

Also, Mike McGlone, chief strategist at Bloomberg, expressed doubts about the continuation of the price of the tool Bitcoin, citing macroeconomic conditions, such as the possibility of entering a recession, as a very big obstacle in the way of Bitcoin:

With the global economy heading into recession and most central banks tightening contractionary monetary policies, I think bearish macroeconomic conditions are still the main obstacle to Bitcoin price and crypto market growth.

This sentiment is also seen among many crypto space activists on Twitter. For example, the cryptocurrency analyst and trader “Capo of Crypto” on Twitter said:

I’ve been checking the charts all this time and avoiding the twitter buzz. The shape and form of recent price growth and the way long-term resistances are being tested seem clearly manipulated. There is no real demand in the market.

Again, this is the biggest bull trap I have ever seen.

Bitcoin price
Source: Twitter

However, this bearish sentiment does not include all market participants. Market analysis platform IncomeSharks shared a famous chart the other day, dubbed the “Wall Street Cheat Sheet,” mocking the idea that recent growth is a bull trap:

Bears are in the stage of disbelief. “It’s a bull trap”… “It’s market manipulation”… are all the words heard in the stage of disbelief.

Wall Street cheat sheet
The famous “Wall Street Cheat Sheet” chart that shows the psychological cycles of the market; Source: twitter

Also, in the midst of this bipolar atmosphere on Twitter, which is full of bullish and bearish analysts, one of the long-time Bitcoin analysts, Dan Held, shared this tweet:

My technical analysis of Bitcoin price:

The humor of technical analysis
Source: Twitter

At the time of writing, the current price of Bitcoin is $22,762, and the crypto fear and greed index shows a significant growth of 50 and has entered the neutral zone.

source

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