Bitcoin bull trap?
Bitcoin and the crypto market continue to rise as an extremely nervous stock market goes in the opposite direction. Is the latest Bitcoin rally about to run out of steam?
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Bitcoin bull trap? Bitcoin Reaches Significant Price Level
Bitcoin bull trap? AOn Monday, Bitcoin experienced a surge that brought it to a high of $31,000, approaching a major resistance level. However, the price has since retreated to around $30,550. It is uncertain whether Bitcoin will attempt to reach $31,000 again today. In the short term, Bitcoin may be at risk of following a head and shoulders chart pattern, unless it rises above $31,800 to nullify the pattern and make a serious attempt at breaking the significant resistance level.
The Trend Is Your Friend
When examining Bitcoin's higher time frame, the outlook appears optimistic. The saying "the trend is your friend" still holds true, as a pattern of higher highs and higher lows has emerged since the cycle's low at approximately $15,500. The only question that remains is whether the next higher high can be achieved.
Stock Market Propagates Fear
The current underperformance of the stock market may be having an impact on the crypto market. Some crypto traders may be closely monitoring the stock market to see if any measures are taken to address the situation.
However, the S&P has a strong support level below its 200-day moving average, which could help prevent a further decline in price and even push it higher.
As the market experiences high levels of fear and approaches a crucial support level, it may present an opportunity for those interested in long-term investments.
Short Term Pull Back?
In regards to Bitcoin, there are several factors suggesting a potential rejection of $31,000 in the short term. Analyzing the liquidation levels on the Hyblock Capital website, it is observed that approximately 460 long positions could be liquidated compared to only 90 short positions. This indicates a higher likelihood of long positions being closed.
Short-term Relative Strength Indicators (RSIs) are currently in oversold territory, which suggests a potential pullback. However, it is important to note that the market is unpredictable, and traders should exercise extreme caution.
Bitcoin could be considered as a valuable asset to accumulate gradually over a period of years. Given the increasing debasement of fiat currencies, it might be beneficial to accumulate scarce and hard assets for long-term investment.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.