- Bitcoin price could be inflating to trap bulls around the $28,000 region.
- On-chain data shows a short-term accumulation could be in play on Binance crypto exchange.
- A decisive flip of the $30,000 psychological level into a support floor will invalidate the bearish thesis.
Bitcoin (BTC) price remains unfazed even after the multiple spot BTC ETF delays from the US Securities & Exchange Commission (SEC). But investors need to be careful with the ongoing BTC rally as it could be a trap for early bulls.
Also read: Enter the Ether: VanEck releases two ETF ads ahead of possible Monday launch
Bitcoin price rise could be deception
Bitcoin (BTC) price is currently close to retesting the 20-week Exponential Moving Average (EMA) as shown in the chart below. The previous article sheds light on a potential fractal that could trigger a massive correction, should history repeat.
Read more: Bitcoin Weekly Forecast: BTC downside likely after 20-week EMA culls bulls
Bitcoin price has more upside before the sellers trap bulls however. As seen in March 2022, after the bearish crossover between the 20-week EMA and 200-day Simple Moving Average (SMA), BTC recovered above the 20-week EMA and faced rejection at the hands of the 200-day SMA.
If something similar were to happen now, then short-sellers are likely to wait for Bitcoin price to reach roughly $28,000, so that more longs can pile on.
With the SEC delaying most spot Bitcoin Exchange-Traded Funds (ETF), the bearish news could have already started building up.
Regardless, the technicals do point toward a short-term bullishness for Bitcoin price. Short-term holders, in particular, are already active, as seen in the previous article.
Read more: This short-term Bitcoin holder indicator forecasts another rally for BTC
BTC/USD 1-day chart
On-chain data shows short-term accumulation
According to the data analytics firm CryptoQuant, the Taker Buy Sell Ratio indicator on Binance is seeing an uptick. Shortly after this indicator saw spikes in the Taker Buy Sell Ratio at the start of 2023, Bitcoin price kick-started a massive bull rally.
The current spikes could suggest that short-term accumulation might be happening under the hood.
BTC Taker Buy Sell Ratio
Conclusion: Bull Trap disguised in rally or the other way around?
The outlook explored in last week’s article from last week is still in play. Instead of getting rejected at the 20-week EMA, BTC price could retest the 200-day SMA at nearly $28,000 and face a sell-off.
The bull trap should come into play at this level and kickstart a sell-off. But if BTC does extend, then it is probably heading higher to collect the buy-side liquidity around the $30,000 psychological level as shown in the chart below.
But if this is, in fact, a play to trap the bears, then Bitcoin price should flip the $30,000 psychological level and hold above it. In such a case, sidelined buyers could jump to accumulate, pushing BTC higher to potentially $35,000.
BTC/USDT 1-day chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.