Although bitcoin (BTC) has seen a sharp price rally to kick off the new year, Many industry experts are not convinced that the cryptocurrency will continue its upward trajectory, at least in the short and medium term..
The impressive price increase -which saw BTC experience 14 days of consecutive rallies earlier this month- has led many to consider whether the rise marks a significant “breakthrough” or is indicative of a “bull trap”.
Speaking to Cointelegraph on Jan. 23, James Edwards – a cryptocurrency analyst at Australia-based fintech firm Finder – said that the argument for a “bull trap” is stronger, warning that the recent rise could be “ephemeral”.
I affirm that While the BTC price moved higher over the weekend, the NASDAQ Composite and S&P 500 also made similar rallies.:
“This suggests to me that the rise in cryptocurrencies is not one-off, but part of a broader market rally, as inflation numbers have flattened and risk appetite appears to be returning to investing. So bitcoin is enjoying the effects of some positive sentiment that originated elsewhere. This is likely to be short-lived.”
Edwards added that cryptocurrency markets still have to clear some “major hurdles before a new bull market can start”.
Among those hurdles, he mentioned the continuing fallout from the FTX collapse and Genesis’ recent Chapter 11 bankruptcy filing. on January 19.
“As such, we are going to see more selling and drawdowns as cryptocurrency companies adjust their balance sheets and dump tokens on the market to cover debt and try to stay afloat,” he explained..
Speaking to Cointelegraph, the senior commodity strategist at Bloomberg Intelligence, Mike McGlone, also did not trust the trajectory of the price of BTC; he cited recession-like macroeconomic conditions as too great a barrier for BTC to overcome.
“With the world tipping into recession and most central banks tightening up, I think the macroeconomic ebb tide remains the main headwind for bitcoin and cryptocurrency prices.”
The sentiment was also shared among some in the Twitter crypto community; the cryptocurrency analyst and swing trader “Capo of Crypto” told his 710,000 Twitter followers on Jan. 21 that BTC’s push past resistance looks like “the biggest bull trap” he’s ever seen.:
I’ve been checking charts all this time, avoiding noise from Twitter. The way the upward movement is happening, the way htf resistances are being tested… it clearly looks manipulated, no real demand.
Once again, the biggest bull trap I’ve ever seen. But they won’t trap me.
— The Capo Of Crypto (@CryptoCapo_) January 21, 2023
I’ve been reviewing charts all this time, avoiding the noise of Twitter. The way the bullish movement is taking place, the way the htf resistances are being tested… seems clearly manipulated, with no real demand. Once again the biggest bull trap I have ever seen. But they won’t catch me
Nevertheless, not all industry experts are so bearish.
The cryptocurrency market analysis platform IncomeSharks looked bullish; shared a “Wall St. Cheat Sheet” chart with his 379,300 Twitter followers on Jan. 22 mocking bears who think recent price moves are indicative of a “bull trap.”.
#Bears at the Denial stage. “It’s just a bull trap” “It’s all manipulation”. Waiting for the Panic part next… pic.twitter.com/Lo6nWyZPD2
— IncomeSharks (@IncomeSharks) January 22, 2023
The bears are in denial. “It’s just a bull trap” “It’s all manipulation.” Waiting for the Panic part next… pic.twitter.com/Lo6nWyZPD2
Sem AgterbergCEO and Co-Founder of CryptoSea, an AI-based trading bot, too shared recently a flurry of messages expressing positive sentiment towards BTC price action to his 431,700 Twitter followers, suggesting that a “BULLISH BREAKOUT” towards $25,000 could soon occur.
For his part, others have refrained from making a price forecast, likely given the unpredictability of cryptocurrency markets.
Here’s my technical analysis of where Bitcoin’s price is going. pic.twitter.com/cOFueErgGq
—Dan Held (@danheld) January 21, 2023
Here is my technical analysis of where the bitcoin price is going. pic.twitter.com/cOFueErgGq
At the time of publication of this article, bitcoin was trading at $22,738 while the Cryptocurrency Fear and Greed Index was at “Neutral” with a score of 50 out of 100.
The cryptocurrency managed to break out of the “Fear” zone on January 13 – which was then scored at 31 – after the price of BTC increased for seven consecutive days..
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.