Bitcoin and Altcoin Markets Rebound- A Bull Trap?

Bitcoin and the altcoin market at large have had an amazing weekend, with Bitcoin holding the line above $9,500 and altcoins including Neocoin, Algorand and Ethereum posting large gains. Is this a movement, or a bull trap?

Money has been flowing into the cryptocurrency market, with the total marketcap at $266 billion and Bitcoin maintaining 65% market dominance. A number of altcoins have been pumped as the rise in Bitcoin's price has peaked back to where it was a week ago. This appears to be a momentum play, where leveraged traders have rode the wave to make short-term gains.

As a trader, this could be a time to take and crystallize profits. The psychological barrier of $10,000 Bitcoin is powerful, and the momentum and bullish chart movement is waning at present. As a holder of many large altcoins, I am pleased to see some gains, especially in VenChain, which posted a monstrous 37% gain since yesterday.

Looking at the chart, we see that Bitcoin has a resistance at the $10,000 level, and has formed a position that may lead to a downward channel. This could be a bull trap that leads us below $8,500. Bitcoin's price rise was supported by the weekend riots and the uncertainty of the pandemic lockdown re-openings. Bitcoin is seen as an alternative asset outside of the "system", and as an emerging safe-haven asset. Investors are buying gold to prevent portfolio losses, and Bitcoin may be part of the mix as world markets decline.

In the mid to long-term, Bitcoin is a winner, but it appears we may be in tenuous territory here. It is a good idea to take profits and wait for the next run up on this volatile asset.

Sources:

Picture from Pixabay.

https://coinmarketcap.com/currencies/bitcoin/

https://www.google.com/amp/s/cointelegraph.com/news/10-000-bull-trap-why-bitcoin-price-is-now-likely-to-pull-back/amp

https://decrypt.co/30728/mcafee-bitcoin-million-price-prediction?amp=1