Are We Witnessing the Return of the Crypto Bulls or a Bear Market Bull Trap?
The cryptocurrency market has been on a roller coaster ride in recent months, with Bitcoin and Ethereum prices experiencing significant fluctuations. After a period of relative stability, BTC's price catapulted by a remarkable 28% in January, leading to liquidations worth more than $500 million as exchanges closed traders' leveraged short positions.
However, some experts are warning that this sudden surge in BTC's price may not be a sign of a returning bull market and this could be a Bitcoin bull trap.
One important technical indicator to consider is the 200-day EMA, which is widely used to spot macro market trends. When the price of BTC is above the 200-day EMA, it's considered a bullish market trend, and when it is below, it's considered bearish.
Bitcoin has been consolidating around the 200-day EMA for the past four days after trading below it for the past 284 days, before managing to close above the key level yesterday. It's worth noting that the last time Bitcoin's price traded above this level was back on March 27 to April 6, 2022, when the market experienced a false breakout.
Given this, traders are advised to wait for a confirmed breakout and bullish EMA alignment before entering positions in the cryptocurrency market presently, and also to exercise maximum risk management.
BTC's 20-day, 50-day, and 100-day EMAs are currently at $18,660, $17,885, and $18,317, respectively. This shows that the short to long-term trends are bullish, as the current price is above all three EMAs, making this a promising sign that we could get the aforementioned breakout if wider macroeconomic factors allow.
Bitcoin's trading volume is presently at 22,316K with the volume moving average estimated to be 31,547K. With a few more hours left in
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