Bitcoin price could be in a bear trap
Following the sharp drop in the price of bitcoin (BTC) on July 4, which has kept the value of the digital currency hovering around USD 57,000, the question many are asking is where the price will go in the coming weeks. Some are even proposing various scenarios such as BTC being in a bear trap, for example.
The truth is that there are currently marked contrasts among most analystswhile some remain optimistic and assure that the bull run will continue to move forward after the current correction, others believe that the price of BTC may fall to lower levels.
Cryptocurrency analyst identified on X as Blockchaineddbb presented his assessment on what is happening. According to the analysis, a daily close below the 200-day exponential moving average (EMA), currently located at USD 58,000, indicates a high probability that the price will fall to USD 44,000.
Blockchaineddbb reveals the historical impact of losing the daily EMA. “Every time bitcoin experienced this loss, its price decreased by an average of 30%, with losses ranging from 8% to 50%,” he noted.
Such a view is in line with that of the trader known by his pseudonym Skew, who believes that spot sales of around $63,800 have been the main driver of the fall. So, for there to be a trigger, “we need see the market demand and reversal signals. Otherwise, volatility and momentum increase to the downside,” he explained.
Although trader Jelle has a more optimistic view of the EMA indicator. For the analyst, the fact that the price has bounced back to USD 58,000, approaching the 200-day exponential moving average again, is a good sign. However, on July 6, the price went below the indicator again.
In this sense, Rekt Capital predicts that the price of bitcoin back up far enough “as if to convince you that the bull market is over. And then will resume its upward trend«.
Moustache shared similar sentiments, explaining that a retest of the 200-day EMA has “always marked a lower range” over the past 18 months. “I’m really sensing lows vibes here for BTC.”
He further noted that the current correction “It’s just a healthy setback which sets BTC up for a massive uptrend,” after completing the Wyckoff reaccumulation method, according to which the asset’s decline is the result of a previous uptrend that needs to be consolidated.
Scenario for a bear trap
In the current bearish context, which emerged after the Bitcoin rally, there are those who think that the situation fits with what is known as a bear trapa low price level that tricks bearish investors into buying at the worst possible time. These are times when bearish traders sell short, but the downward price movement is short-lived and the asset continues its upward movement.
That Bitcoin is in a bear trap is one of the suspicions for the analyst identified in X as KushMansPicks who comments that “Bitcoin did not reach its next support level by a thousand dollars” so he asks “can anyone else smell a ‘bear trap’?
The investor identified in X as QuintenFrancois also raised the issue of the bear trap, showing the following graph that would show where the price of bitcoin is.
At press time, bitcoin is trading at USD 56,746 according to data from Coingecko, indicating a 2% recovery in the last 24 hours.
With this value, the digital currency is approaching USD 57,615, a significant area of liquidity that, according to Coinglass, could provide the necessary demand pressure. to get it out of the extended downtrend.
As CriptoNoticias reported, BTC registered its lowest price in four months on July 5, after it became known that the defunct Japanese exchange, Mt.Gox, began to settle its debts with creditors.
This fact, together with the sales of bitcoins confiscated by the governments of Germany and the United States, caused the price to fell to $53,485levels that have not been seen since February 26, 2024.
