Since bitcoin reached its peak in early January we’ve been trending downwards. So far $6,000 has been the line in the sand.
Then on Sunday we broke $6,000 and reached a low of $5,755.
So I was surprised on Monday to see we were already above 6k again. And it has me wondering if the current move is a bull trap.
So what’s a bull trap?
In trading, a bull trap is an inaccurate signal that shows a decreasing trend reversing and heading upwards, only to head back downwards and continue the decline.
If it plays out in bitcoin we may see a rally taking us back possibly to the $6,800 area again, before turning and heading decisively below $6,000.
A lot depends on if all the weak hands have been shaken out. If they haven’t, then yes we’re likely going lower.
We are, after all, still up around 140% from this time last year. That’s an excellent return in anyone’s books.
And the fact we broke $6,000 is not a good sign. Generally once support is broken, it becomes future resistance.
On the other hand, bitcoin broke $6,000 on some of the lowest volume of the year. It may not have much follow through.
Regardless if bitcoin goes lower or not, I’m still bullish on bitcoin and cryptocurrency space.
And I still think institutional money will give a big boost to the space.
What do you think? Is bitcoin headed lower or is the low already in place?
and trade cryptos on Binance