Bitcoin stayed above the $7k mark, but it might not be the beginning of a Bull market. On the contrary, BTCUSD might be on a Bull trap

Bitcoin stayed above the $7k mark, but it might not be the beginning of a Bull market. On the contrary, BTCUSD might be on a Bull trap.

The US Federal Reserve is infusing mammoth amounts of money into the economy. In a recent report, it came to light that the Federal Reserve now owned 30% of the US economy.

The printing of such mammoth amounts of money by the Federal Reserve is significant and relevant to Crypto markets as well as equity markets. The US equity markets have, in the last two weeks, recovered more than 20% from its lows. Along with it, Bitcoin is also recovering from its lows and creating highs.

The day’s range for Bitcoin is $7,028.23 — $7,280.07. Currently, BTC is up by 3% or $210.

BTCUSD Chart

BTCUSD Chart Published on TradingView.

 

Bitcoin’s rally might actually be a bull trap

It might be alluring and tempting to jump into the Bitcoin bandwagon seeing the fresh highs it is making. However, the technical analysis of BTC doesn’t have any ground to justify that this uptrend is here to say. 

The Bull trap of BTC can be understood better if one takes a closer look at the US S&P 500 Index (SPX). It is undoubtedly going up. But that is only upon the shoulders of a few big stocks. It is exactly what happens in a Bull trap. Investors prefer putting their money in the more prominent players.

Bitcoin not deciding its own course, and merely following the equity markets is not a very promising sign for BTC investors. 

Once the Bull trap gets over, the equity markets are likely to take a significant drop. And so would Bitcoin. 

 

Technical analysis for BTCUSD

  • If we look at short time frames, the moving averages give a buy signal for Bitcoin. Entry and exit points will be very crucial for all BTCUSD traders in this short time frame.
  • A little longer the time frame, and most of the technical indicators take a complete head turn on BTC. Most of them point to a sell signal.
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