As Dogecoin Surges, Is $44k Bitcoin Showing Signs Of A Classic Bull Trap?
Last Updated on 6 November 2023 by CryptoTips.eu
Many youngsters who buy into Bitcoin (or other cryptocurrencies) have probably seen a pretty good time since half of 2020. Several coins have made stellar gains and rose from obscurity to prominence. The meteoric rise of Dogecoin from January to May 2021, aka from 5 cents to 75 cents, was stuff of legends. This morning, Dogecoin is once again showing signs of revival and is trading upward 22%, exchanging hands for 26 cents now.
On social media this Sunday morning, the crypto sky seems to be the limit and everyone speaks of $50k Bitcoin and 50 cents Dogecoin already.
Let's go baby, Let's go! #DogecoinToTheMoon pic.twitter.com/f4gJk0NtKC
— Oscar (@moreno7798) August 7, 2021
However, experienced traders know that no one is able to predict the market in full and you must always take losses into account.
As Bitcoin has a bullish weekend (it is trading at $44k this morning) and everyone seems hyper-positive again after the fall beneath $30k we saw two weeks ago was rejected, we feel that it’s time to read up on contrarian views as well.
Charles Schwab
Best known of the contrarian traders is of course the obscure CryptoWhale, who has been predicting a market crash for a year or so. By now, he claims to have spotted a classic bull trap in the chart of Bitcoin.
The bull trap in finance (according to the Charles Schwab trading videos) refers to a short-term rally during a downtrend that traps the bullish investors who mistaken it for the start of a new uptrend.
In other words, CryptoWhale is convinced that the recent upswing of Bitcoin from $30k to the high of $44k seen this weekend is only temporary, after which the downtrend, seen starting from its high of $64k in May, will continue.
#Bitcoin Analysis Update:
— CryptoWhale (@CryptoWhale) August 7, 2021
We've been moving exactly how I predicted.
I've made dozens of posts about the likeliness of us seeing a bull trap, which is happening now.
Don't get overly bullish. Many will get rekt when we eventually reverse, and tank far below the $30K support. pic.twitter.com/laEAjwVWVo
Contrarian investor Cryptowhale, helped by the well-known Wall Street Cheat Sheet, stated:
We’ve been moving exactly how I predicted. I’ve made dozens of posts about the likeliness of us seeing a bull trap, which is happening now. Don’t get overly bullish. Many will get rekt when we eventually reverse, and tank far below the $30K support.
The next few days will show whether or not he has a point.
Sodel_Vladyslav / Depositphotos.com
