Bitcoin Pumps +10% Bull Trap or Trend Reversal?
Bitcoin( BINANCE:BTCUSDT ) has experienced over a +10% increase in the past two days, which came as a surprise to many analysts considering the previous bearish momentum. In other words, Bitcoin is on something of a roller coaster lately.
The question now is whether Bitcoin has started a new bullish trend or if its likely to see another decline.
Lets dive into the 4-hour chart of Bitcoin. Currently, Bitcoin is approaching a resistance zone($94,850-$93,00, a Cumulative Short Liquidation Leverage($94,710-$94,063), and the monthly pivot point. This cluster of resistances, combined with the recent upward momentum, might make it challenging for Bitcoin to break through.
Its also worth noting that the trading volume during this recent rally hasnt been particularly high, so Bitcoin could still surprise us. This recent behavior shows that Bitcoin can move sharply both up and down, so its crucial to maintain proper risk management.
From an Elliott Wave perspective, considering Bitcoins recent decline, I initially expected that Bitcoin might at least test the low of its main wave 3 again. However, the recent rebound suggests that the main wave 5 may be truncated, and the corrective waves could still push Bitcoin lower, potentially even below $75,000.
From a classical technical analysis perspective, Bitcoin might be forming a bearish flag pattern, with the ascending channel acting as the flags pole.
In addition, the USDT.D%( CRYPTOCAP:USDT.D ) is still on an upward trend, which indicates that the cryptocurrency market might still face downward pressure.
Moreover, geopolitical tensions, such as those between the U.S. and Venezuela, could also act as a trigger for further Bitcoin declines if they escalate.
Lastly, the S&P 500 inde SP:SPX ), des