Breakthrough or bull trap? Experts weigh

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While Bitcoin (BTC) has seen a strong price pump to kick off the new year, many industry experts are unconvinced that the cryptocurrency will continue its upward trajectory at least in the short to medium term.

The impressive price surge that saw BTC experience 14 days of consecutive price increases earlier this month has left many wondering if the surge marks a meaningful breakout or indicates a bull trap. »

Speaking to Cointelegraph on January 23, James Edwards, cryptocurrency analyst at Australian fintech firm Finder, said the case for a bull trap was stronger, warning that the recent surge could be of short duration.

He said that while the price of BTC rose over the weekend, the NASDAQ Composite and S&P 500 also made similar rallies:

“This suggests to me that the crypto rally is not unique, and rather part of a broader market rise as inflation numbers stagnate and risk appetite seems to return to investments. Thus, Bitcoin is simply enjoying the effects of the positive sentiment that has arisen that is likely to be short-lived.

Edwards added that cryptocurrency markets still have significant hurdles to overcome before a new bull market can begin.

Among those hurdles, he mentioned the continued fallout from the FTX collapse and Genesis’ recent Chapter 11 filing on January 19.

“As such, we are going to see further selling off and downsizing as crypto firms adjust their balance sheets and throw tokens into the market to cover debt and try to stay afloat,” he said. he explains.

In a statement to Cointelegraph, Bloomberg Intelligence’s senior commodities strategist Mike McGlone was also not confident in BTC’s price trajectory, citing recession-like macro conditions as too big a hurdle for the market to take. BTC can overcome them.

As the world leans into recession and most central banks tighten, I believe the macroeconomic ebb tide is still the main headwind for Bitcoin and crypto prices.

The sentiment was also shared by some on Crypto Twitter, with cryptocurrency analyst and swing trader Capo of Crypto telling his 710,000 Twitter followers on Jan. 21 that BTC pushing back against resistance looks like the biggest bull trap we’ve ever seen. he has ever seen:

I’ve been checking the charts the whole time, avoiding the Twitter noise. The way the up move is happening, the way the htf resistances are being tested…it seems clearly manipulated, no real demand.

Again, the biggest bull trap I have ever seen. But they won’t trap me.

he Capo Of Crypto (@CryptoCapo_) January 21, 2023

However, not all industry pundits were so bearish.

Cryptocurrency market analysis platform IncomeSharks appeared bullish, after sharing a Wall St. Cheat Sheet chart with its 379,300 Twitter followers on Jan. 22, mocking Bears who believe the latest moves in prices are indicative of a bull trap.

#Bears in denial. “It’s just a bull trap” “It’s just manipulation”. Waiting for the Panic part next… pic.twitter.com/Lo6nWyZPD2

IncomeSharks (@IncomeSharks) January 22, 2023

Sem Agterberg, CEO and co-founder of AI-based trading bot CryptoSea also recently shared a flood of posts expressing positive sentiment towards BTC price action to his 431,700 Twitter followers, suggesting that a BULL FLAG BREAKOUT to $25,000 could soon be on the cards:

Meanwhile, others held off on making a prediction on the price, likely given the unpredictability in the crypto markets.

Here is my technical analysis of where Bitcoin price is heading. pic.twitter.com/cOFueErgGq

Dan Held (@danheld) January 21, 2023

Related: Bitcoin Price Consolidation Opens Door for APE, MANA, AAVE and FIL to Go Higher

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

The cryptocurrency managed to break out of the fear zone on January 13, which was later rated at 31 after the price of BTC rose for seven consecutive days.

Bitcoin market sentiment expressed on a scale of 0-100 Fear & Greed Index. Source: Alternative.me.

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