Sentiment Divided Between Bull Trap or Bottom as Bitcoin Nears 23K Cryptocurrency

A recent rise in the price of cryptocurrencies like Bitcoin and Ethereum has sparked a distantly familiar debate: whether a market rebound might be imminent or whether recent trends are just a prelude to more pain.

Since Bitcoin hit an all-time high of around $69,000 in November 2021, digital assets have been hampered by higher interest rates and a series of high-profile crashes – companies like Three Arrows Capital (3AC) and FTX, to name a few.

While Bitcoin is down nearly 67% from its peak, digital assets – and other investments like stocks – have had a positive start to the year. The price of Bitcoin has risen 38% so far this month to $22,858, its highest price since last August. Ethereum, meanwhile, saw the value of ETH also surge by around 38% to $1,645, according to CoinGecko.

Cryptocurrency prices started rising earlier this month ahead of an economic report that showed inflation had cooled in December. The reading also raised hopes that the Federal Reserve is raising interest rates less aggressively than it did last year to rein in soaring prices.

But be weary, say the prudent. Many crypto commentators think the recent price rally is too good to be true and are calling the rally a bullish trap, predicting that the breakout will collapse and burn traders who mistook it for the start of a new uptrend. .

Others following the rally are also skeptical. A Twitter poll conducted by a popular Bitcoin page reached a consensus among more than 18,000 attendees that the rally was indeed a bull trap on January 15.

More recently, “crypto cap“, a leading influencer and self-proclaimed crypto analyst, agreed with the bearish take, saying the rally “seems clearly manipulated” and is the “biggest bull trap” they have ever seen.

The sentiment among cautious crypto enthusiasts was picked up on Reddit, where one user pushed back against comments supporting a market bottom made in a news article.

“Hard to believe that only about a week ago everyone and their analyst solemnly and confidently proclaimed that [Bitcoin at] 12k was unavoidable and unavoidable,” the user said.

And, of course, there’s Jim Cramer. The MSNBC host mad money tweeted on Wednesday that the recent bounce is “manipulation” and further proof that digital assets are a “fictitious market.”

The mixed accuracy of Cramer’s long-term comment became the subject of ridicule, prompting numerous memes and the popularity of accounts like the “Inverse Cramer ETFa fictional exchange-traded fund that recommends the opposite of Cramer’s advice.

In response to Cramer’s assertion on Wednesday, several accounts took the host’s pessimism as a positive sign, such as Dan Held, Head of Growth Marketing at Crypto Exchange Kraken, who replied, “The bottom is there!”

Other influential accounts on Twitter were sincerely optimistic, such as “PlanB”, which declared a new digital asset bull market had begun when Bitcoin’s recent pump took hold. Some community members took the opportunity to emphasize those who think digital assets will suffer more losses.

The price hike has also left a few people on Wall Street scratching their heads.

A research report released Friday by JP Morgan analysts could not confidently explain the crypto price surge, but acknowledged that market conditions for riskier assets have become more favorable, citing the publication from the recent inflation report.

“We don’t have a good answer on the January rally in crypto so far, but we think it’s emblematic of the underlying belief that many still have in cryptocurrencies,” he said. he declares. “Crypto-bulls and whales seem to have been reinvigorated.”

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