Bitcoin prices have pushed higher over the weekend, continuing the rally that began with the new year. The asset has now notched up a 45% gain since its cycle low of $15,665 on November 22.
However, there are mounting fears of a bull trap despite the rally still showing strength. A bull trap is a trend reversal that forces market participants on the wrong side of price action to exit positions with unexpected losses.
Bitcoin markets have been down-trending since late 2021, and the asset is still 67% away from its peak. That trend could well continue into this year.
Analyst and trader “il Capo Of Crypto,” said the recent market movements looked manipulated with no real demand. It is “the biggest bull trap I’ve ever seen,” he exclaimed over the weekend.
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.
— il Capo Of Crypto (@CryptoCapo_) January 21, 2023
With the global economy in a dire state, a looming recession, and very little disposable income for investing in risk asset classes, it does seem a little premature to call it a bull market just yet.
The does appear to be more sentiment leading towards the bull trap scenario, however, with patterns such as this one appearing on Tradingview.
BTC – BullTrap and most likely heading back down to 12K for BITSTAMP:BTCUSD by mycotoxin #BTCUSD https://t.co/IoeADuTzDx pic.twitter.com/wJERrSymQc
— BitcoinAgile (@bitcoinagile) January 23, 2023
Others reposted that market psychology chart that pops up during every bear market.
#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 bulls countered with an observation of how much prices had moved off the floor.
“When price has moved 50% off the lows it’s not a bull trap anymore, it’s a move that you have missed.”
Popular analyst and chart guru ‘PlanB’ remains confident that the bear market is over.
WOW! Bitcoin price above short term holder (STH) and realized price. AND .. STH, realized and 2Y realized price are all increasing again. Further proof that the bear is over and the bull market has started🚀
More explanation of this chart in this video:https://t.co/NgzaiQ81Zw pic.twitter.com/z3UrePtoRO
— PlanB (@100trillionUSD) January 22, 2023
BTC Price Outlook
Bitcoin was trading at $22,787 at the time of writing following 24 hours of consolidation. On Jan. 23, it hit an intraday high of $23,262 which is its highest price level since mid-August.
Resistance at the previous September high was broken, suggesting the bulls have not run out of steam just yet.
BTC has made 33.5% over the past seven days and is at a five-month high. With total crypto market capitalization approaching $1.1 trillion again, things do appear to be on the bullish side this Monday morning.
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