The future of Bitcoin is promising but also fraught with risks.
Is BTC signaling another 'bull trap' or the beginning of a price squeeze?
For Bitcoin [BTC] to maintain its upward trend, it needs to surpass the resistance levels above. If not, as TinTucBitcoin has pointed out, sell orders are waiting to take advantage of any signs of weakness.
However, regaining high price levels will not be easy.
History shows that the excitement of breaking through often lures weak hands to take profits too early, allowing bears to set up a liquidity sweep down.
Currently, with BTC nearing the end of January high around 106,249 USD, this situation feels eerily familiar. Could this be the beginning of a well-orchestrated bull trap?
Attention to Bitcoin's STH group
Since Bitcoin surpassed the 93K level, the STH MVRV (Market Value to Realized Value) ratio has been steadily increasing, with short-term holders (> 155 days) currently enjoying a profit of about +10%.
In other words, these short-term players are sitting on unrealized profits, with entry points lower than the current market price of BTC.
Source: Glassnode
Looking back at the previous cycle, the STH MVRV ratio peaked when BTC hit 98,154 USD on November 21.
However, the price increase does not stop there. Bitcoin continued to reach 106K in the following month, absorbing pressure.
But that's when things went downhill. Buy-side support couldn't hold, as short-term holders flooded the market with liquidity, pushing the NUPL (Net Unrealized Profit/Loss) ratio deep into the red.
This liquidity dump triggered a market correction, with BTC ultimately closing at 76,270 USD at the beginning of April.
Are the bears ready to roar again?
Coinglass data is sending warning signals: Open Interest (OI) in Bitcoin derivative products has surged back to 66 billion USD, equivalent to the level when BTC was near 104K in the last quarter of last year.
This is a high-risk game.
Source: Coinglass
With price behaviors testing historical peaks, short-term holders are enjoying good profits, and Open Interest is heating up, volatility factors are all set.
The coming days may decide whether Bitcoin's rally is truly sustainable or just a cleverly disguised price trap.
Source: https://tintucbitcoin.com/gau-bitcoin-can-trong-nguong-gia-nay-co-the-la-bay-lon/
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