Is this the start of a new bull market cycle or simply a bull trap? Technical analysts and industry watchers appear to be unsure as well.
Bitcoin prices rose over the weekend, extending the boom that began with the new year. Since its cycle low of $15,665 on November 22, the asset has gained 45%.
Despite the rally’s vigour, there are growing concerns about a bull trap. A bull trap is a trend reversal that causes market participants who are on the wrong side of the price movement to exit positions with large losses.
Bitcoin markets have been declining since late 2021, and the asset is still 67% behind its all-time high. This tendency is likely to continue this year.
According to analyst and trader “il Capo Of Crypto,” recent market moves appear contrived, with no real demand. He described it as “the biggest bull trap I’ve ever seen” during the weekend.
With the global economy in shambles, a coming recession, and very little discretionary money for investing in risk asset classes, it appears premature to declare a bull market.
However, there appears to be more sentiment pointing to a bull trap situation, with patterns like this one showing on Tradingview.
Others shared the market psychology chart, which appears during every weak market.
The bulls responded by noting how far prices had gone off the floor.
“When price has moved 50% off the lows it’s not a bull trap anymore, it’s a move that you have missed.”
Popular analyst and chart expert ‘PlanB’ believes the bear market is gone.
Following a 24-hour consolidation, Bitcoin was trading at $22,787 at the time of writing. On January 23, it reached an intraday high of $23,262, its highest level since mid-August.
Resistance at the previous September high was broken, indicating that the bulls have not yet run out of steam.
BTC has gained 33.5% in the last seven days, reaching a five-month high. With global crypto market value once again reaching $1.1 trillion, things appear to be on the upswing this Monday morning.
