Bitcoin price registered a palpable spike earlier today, contributing to altcoins registering a similar bullish outlook. While this impulsive move is impressive, it could be a near-term bull trap before BTC revisits the Feb. 24 levels.
Back to the pavilion
Yes, Bitcoin price rose 9.6% today, but looks are deceiving. Why? Well, because despite the allure of riding a bull wave, the daily volume seems to be bottoming out. In fact, the volume did not exceed the 50-day moving average. While the daily candlestick still has a few hours before it closes, it hasn’t even surpassed yesterday’s value – a day when Bitcoin’s price only returned 1.95% at the close.
This questionable pump is supported by the mediocre performance of the Open Interest. Open Interest has increased by about $3 million to $359 million in the past 24 hours. This development indicates that the recent peak was not well supported by large orders, suggesting it was built on shaky ground.
Therefore, there is a good chance that BTC will preemptively reverse the uptrend and catch bulls by surprise.
Source: Saniment
It looks like this rebound is likely to reverse the trend around USD 42,894 and return to Monday’s low of $37,154. In some cases, the price of BTC will fill the fair value gap (FVG) between $36,330 and $36,967.
A bounce around this area will be key to triggering a 23% move to tag the lower bound of the weekly demand zone, which stretches from $45,550 to $51,860.
Source: BTC/USDT on TradingView
What do these statistics say?
Since this run-up is a short-term bull trap, investors can expect BTC to kick off a massive bull rally around $37,000 to $36,000. This outlook is supported by the recent surge in interest from both retail and high net worth investors.
The number of wallets with between 1-100 and 100-10,000 BTC has been increasing since February 1. In total, the number of addresses in the first category of retail grew by 15,000 and the second category by 200.
This spike seemed to suggest that the retail sector is starting to experience dips and slowly turning bullish on Bitcoin.
Source: Saniment
All in all, the short-term bulltrap is something investors should consider.
The price of Bitcoin will most likely be knocked down around $42,894 resulting in a steep correction. This allows market makers to expand the long positions by liquidating them.