Bitcoin has surged by 23% in the last 7 days, rising from $50k to $66k. Is this the start of a rally towards $100k or a bull trap that will lead us to a big retracement ? We will try to answer those questions in today’s article.
Is A Rally To $100k Possible
Bitcoin ETFs are still the center of attention nearly 2 months after their approval on January 10th. The launch was a success, with now more than 768,000 Bitcoins under management :
Source : Dune.com
Although initially, we saw a lot of Bitcoin leaving the Grayscale ETFs, this is now compensated by the other ETFs :
Source : Dune.com
This is surely one of the reasons Bitcoin’s price went up. It’s also important to note that these ETFs are a publicity for cryptocurrency in general.
Now that investors see that the world’s biggest asset manager, aka BlackRock, is endorsing Bitcoin, they will have more confidence to invest in crypto.
Furthermore, another sign indicating that this is just the beginning of a massive rally is the fact that most retail investors have yet to enter the market :
Source : Google Trends
A good way to see that is through Google Trends, which helps find what people research online. At the peak of the hype, interest will easily be near 100, just like in the last bull market.
Is That A Bulltrap ?
It is the opinion of JP Morgan analysts that they believe the halving event will have a negative impact because it will cut miners’ revenues in half (6.25 BTC → 3.125 BTC).
So miners will have to sell their Bitcoin to sustain their activity.
Moreover, if we look at the past, after a strong acceleration even during a bull run, there are retracements that can sometimes go down to -40% :
Green traits represent the halving event
So, we are not safe from a strong pullback that will surely scare a lot of unprepared investors. However, this will be an opportunity to enter the market or reinforce existing positions.
Something is sure : the next weeks and months are going to be very, very interesting and exciting to follow!
As always thank you for reading !
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Disclaimer : This is not a financial advice, you need to do your own research !
