Will Bitcoin's value stay above $92,000 and keep growing, or is it a deceitful spike in price?
Crypto Chronicle
Recently, the leading digital asset, Bitcoin, soared over the $91,000 mark, marking the realized price for short-term investors. This surge indicates an increasing confidence within the crypto market, but some analysts question whether this is merely a bull trap leading to a significant drop or a sign of a sustained rally heading towards $100,000 again.
Following Trump's statements about potentially reducing high tariffs imposed on China, both stock and crypto markets responded positively. Bitcoin has rebounded, experiencing a +6% increase in the last 24 hours. During this period, the asset briefly touched $94,000 before slightly decreasing and is now trading at $92,497.
With Bitcoin's momentum rekindling hopes for a prolonged rally, it could potentially push the asset back towards $100,000. However, CryptoQuant collaborator Avocado_onchain advises caution. Short-term investors are prone to selling when the asset surges quickly in order to secure profits but are also likely to exit the market when the token drops near their purchase price to avoid losses.
To better understand investor behavior, CryptoQuant's on-chain analyst, Quicktake, analyzed the behavior of recently acquired Bitcoin holders. This group generally enters the market during bullish phases and holds onto their assets even during corrections. After a decline, these investors seldom sell their Bitcoin but instead, anticipate a recovery.
When the market experiences a strong rally, the group tends to cash in their profits by selling to new market entrants. However, when Bitcoin starts to decline and approaches their purchase price, short-term holders often exit the market. Avocado_onchain shared a graph illustrating how, after each Bitcoin halving, price peaks have consistently surpassed the realized price level for investors who bought the asset within the previous 3 months.
In addition, the analyst warned of a possible double top formation, much like the one seen in 2021. This pattern often precedes a significant drop in the asset. The analyst wrote:
"When Bitcoin hit its all-time high of $109,000 in January, it significantly surpassed the realized price level, indicating that it could have been the first peak of a potential double top formation. Therefore, instead of chasing the rally, it would be wiser for holders to adopt a more cautious approach."
Meanwhile, crypto analyst Xanrox has expressed concerns about a bull trap set by whales to entice retail investors before another bearish phase, following Bitcoin's breakout from a descending wedge pattern.
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Remember, always do your own research. This article is for informational purposes only and should not be considered financial advice.
While not explicitly mentioned in the article, a bull trap or double top isn't confirmed without sustained ETF inflows and macroeconomic stability. Analysts are, however, emphasizing historical halving-driven cycles, highlighting potential post-2024 halving gains, with technical patterns like bull traps needing confirmation through these factors[1][3][5]. On the other hand, risks such as regulatory shifts or ETF flow reversals could still exacerbate double-top scenarios[1][5].
- As Bitcoin surged over $91,000, some analysts are wiser to question if this is merely a bull trap leading to a decreasing trend, or a sign of a sustained rally towards $100,000 again in the finance sector.
- The asset's rebound, influenced by positive stock and crypto market responses, experienced a +6% increase, but during the phase, it briefly touched $94,000 before slightly decreasing, now trading at $92,497.
- CryptoQuant's on-chain analyst, Quicktake, found that recently acquired Bitcoin holders, who predominantly enter the market during bullish phases, tend to anticipate a recovery after a decline, rather than selling their Bitcoin.
- In advising caution, Avocado_onchain shared a graph illustrating how, after each Bitcoin halving, price peaks have consistently surpassed the average realized price level for investors who bought the asset within the previous 3 months, potentially indicating a double top formation followed by a significant drop in the asset's value.
