This month the Bitcoin hit a new record but many believe its recent surge may be short-lived. Although it has seen a sharp price surge in the opening of the year, many industry insiders are not convinced that the cryptocurrency will continue its upward trajectory. at least in the short to medium term.
The impressive price surge – which saw BTC experience 14 days of consecutive increases at the beginning of the month – has prompted many to consider whether the surge marks one “breakthrough” significant or if it is indicative of a “Bull Trap”.
Speaking to Cointelegraph, James Edwards – cryptocurrency analyst at Australian fintech firm Finder – said the topic of the “Bull Trap” is louder, warning that the recent surge could be “short-lived.”
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According to the analyst, while it is true that the price of Bitcoin moved higher during the end of last week, it is equally true that the NASDAQ Composite and the S&P 500 have made similar rallies.
“This suggests to me that the cryptocurrency rally is not unique and is instead part of a broader market rally as inflation data stalls and investing appears to be turning risk-on again. So Bitcoin is just enjoying the effects of positive sentiment that originated elsewhere. It is likely to be short-lived.”
Edwards added that the cryptocurrency markets still have some “significant hurdles to overcome before a new bull market can begin”.
Among these obstacles, he mentioned the continuing aftermath of FTX’s collapse and Chapter 11 filing by Genesis on January 19th.
“As a result, we will attend to further clearance sales and downsizings, as cryptocurrency companies adjust their balance sheets and dump tokens on the market to cover debts and try to stay afloat,” Edwards explained.
Also Mike McGlone, Senior Commodity Strategist di Bloomberg Intelligence, he was not confident about the BTC price trajectory, citing recession-like macroeconomic conditions as too big a barrier for BTC to overcome.
“With the world in recession and most central banks tightening the pace, I believe the macroeconomic tide is still the major headwind for Bitcoin and cryptocurrency prices.”
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However, not all industry experts are so cautious.
The cryptocurrency market analysis platform IncomeSharks it is, for example, bullish, as the graph demonstrates “Wall St. Cheat Sheet” which he shared with his own 379,300 Twitter followers on January 22ndmaking fun of the bears who believe that the latest price movements are indicative of a “bull trap”.
Also Sem Agterberg, CEO and co-founder of CryptoSeae trading bot, recently shared with his 431,700 Twitter followers a series of posts expressing positive sentiment towards the BTC price action, suggesting that a “BULL FLAG BREAKOUT” towards $25,000 may soon be in sight.
Meanwhile, others have refrained from making price predictions, likely due to theunpredictability of the cryptocurrency markets.