Bitcoin’s price rally: Watch out for this if you choose to jump in
Bitcoin’s 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 short-term bull trap before BTC revisits its 24 February levels.
Yes, Bitcoin’s price rallied by 9.6% today, but looks can be deceiving. Why? Well, because despite the allure of riding a bull wave, the daily volume seems to be down in the dumps. In fact, the volume did not cross the 50-day moving average. Although the daily candlestick has a few more hours before it closes, it has not even surpassed yesterday’s value – A day during which Bitcoin’s price returned only 1.95% gains at the close.
Supporting this questionable pump is the lacklustre performance of the Open Interest. The Open Interest has increased by roughly $3 million over the past 24 hours to $359 million. This development indicates that the recent spike did not have a proper backing with large orders, suggesting that is built on shaky grounds.
Hence, there is a good chance BTC will preemptively reverse the uptrend and catch bulls off guard.
Source: Santiment
From the looks of it, this upswing will be likely to reverse the trend around $42,894 and return to sweep Monday’s low at $37,154. In some cases, BTC’s price will fill the fair value gap (FVG) present between $36,330 and $36,967.
A bounce around this area will be key to triggering a 23% move to tag the lower limit of the weekly demand zone, extending from $45,550 to $51,860.
Source: BTC/USDT on TradingView
Since this run-up is a short-term bull trap, investors can expect BTC to kick-start a massive bull rally at around $37,000 to $36,000. Backing this outlook is the recent surge in interest from both retail and high net-worth
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