Editor’s Note
- Beware of Bitcoin bull traps
- Recurring bull trap patterns
- Moves of “smart money”
Beware of Bitcoin bull traps
Recent data analyses suggest that Bitcoin’s current rally is likely a “bull trap,” or a false price rise within a still-intense bear market.
This pattern has repeated itself in the past, with the time required to reach a new low after a false rally becoming increasingly shorter.
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The current cycle is more dangerous because the peak is being reached amidst investor apathy and low public interest in crypto.
“Smart money,” or big money, is flowing instead into real sectors such as traditional stocks, energy, metals, and commodities.
Investors face the choice of staying with Bitcoin or reviewing their portfolios and switching to the real sector.
Recurring Bull Trap Patterns
This apparent bullish price rise is simply a reversal rally, or a false price rise, within a still severe bear market.
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This bull trap pattern keeps repeating itself. In 2014, it took 174 days for the price to reach a new low after a false rally. In 2018, that took 143 days.
In the most recent cycle, it took on average only about 140 days to reach a new low after a false rally.
The current cycle is considered more dangerous because the market peaked amidst apathy, not euphoria.
The Movement of “Smart Money”
“Smart money,” or big money, is flowing en masse into real sectors such as traditional stocks, energy, metals, and commodities, where a genuine bull market is underway.
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Investors face two choices: continue holding Bitcoin with the risk of a pitfall, or evaluate their portfolios and look at the real sector. ***tok
