July 23, 2024
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Bitcoin News

Bitcoin Price Surge: Breakthrough or Bull Trap? Pundits Weigh in

This month, Bitcoin nearly surpassed the record for the longest stretch of daily green price candles, but many feel the recent increase will be short-lived.

While Bitcoin (BTC) has enjoyed a price surge to begin the new year, many industry observers are skeptical that the cryptocurrency will continue to rise – at least in the short to medium term.

The spectacular price surge — which saw BTC experience 14 straight days of price increases earlier this month — has prompted many to question whether the surge represents a big “breakthrough” or a “bull trap.”

Speaking to Cointelegraph on January 23, James Edwards, a cryptocurrency analyst at Australian-based fintech business Finder, warned that the recent increase could be “short-lived.”

He noted that while the Bitcoin price rose over the weekend, the NASDAQ Composite and the S&P 500 also rose:

“This suggests that the rally in crypto is not unique, and instead part of a wider market uplift as inflation figures stall and a risk-on appetite appears to return to investments. So Bitcoin is just enjoying the effects of positive sentiment that originated elsewhere. This is likely to be short-lived.”

According to Edwards, cryptocurrency markets still face “major barriers to overcome before a new bull market can emerge.”

Among the hurdles he noted are the ongoing impact from FTX’s demise and Genesis’ recent Chapter 11 filing on January 19.

“As a result, we’ll see further sell-offs and downsizing as crypto enterprises modify their balance sheets and dump tokens into the market to cover debt and stay afloat,” he explained.

Bloomberg Intelligence Senior Commodity Strategist Mike McGlone, in a statement to Cointelegraph, was also sceptical of the BTC price trend, citing recessionary-like macroeconomic factors as too great a barrier for BTC to overcome.

“With the world leaning into recession and most central banks tightening, I think the macroeconomic ebbing tide is still the primary headwind for Bitcoin and crypto prices.”

Some on Crypto Twitter agreed, with cryptocurrency analyst and swing trader “Capo of Crypto” informing his 710,000 Twitter followers on Jan. 21 that BTC’s breakthrough past resistance appears to be “the largest bull trap” he has ever seen:

However, not all industry analysts were as pessimistic.

IncomeSharks, a cryptocurrency market analysis website, appeared positive on Jan. 22, sharing a “Wall St. Cheat Sheet” chart with its 379,300 Twitter followers, mocking the “Bears” who believe the recent price fluctuations are symptomatic of a “bull trap.”

Sem Agterberg, the CEO and co-founder of AI-based trading bot CryptoSea, recently tweeted a torrent of posts to his 431,700 Twitter followers expressing bullish emotion regarding BTC price action, implying that a “BULL FLAG BREAKOUT” towards $25,000 is imminent:

Others, meanwhile, have refrained from making price predictions, owing to the uncertainty of crypto markets.

According to Alternative.me, Bitcoin (BTC) is currently priced at $22,738, and the Bitcoin Fear and Greed Index is currently at “Neutral” with a score of 50 out of 100.

After the BTC price surged for seven consecutive days, the cryptocurrency managed to break out of the “Fear” zone on Jan. 13, which was then scored at 31.