Bitcoin ($BTC ) recently saw a significant price increase after clearing out the lower side liquidity. It is now trading above $100,000. However, there are two possibilities for what might happen next.
1. Bull Trap:
One possibility is that this price surge could be a "bull trap." In simple terms, a bull trap happens when the market tricks traders into thinking prices will keep rising, only to reverse and fall shortly after. This could mean that after a small price increase, Bitcoin might go down again, trapping those who bought at the higher prices.
2. Recovery from War Impact:
On the other hand, this price movement could be a sign that $BTC
is recovering from the effects of the ongoing war. This would suggest that the market is slowly bouncing back and could continue to rise.
Which one is more likely?
The first possibility, the bull trap, is considered more likely right now. The market’s direction is uncertain, and we could see some fake price movements designed to confuse traders. News, either good or bad, might give us more clarity on the market’s true direction.
What Should You Do?
In times like these, it’s best to be cautious. Consider using small position sizes to limit your risk. As I’ve mentioned before, it might be a good time to buy Bitcoin at lower prices, but be careful not to fall for any traps the market sets.
Stay alert, and remember: patience is key.