Bitcoin's 14-day Rally Is a 'bull rally' or a 'bull rally'?

Original title: "Is Bitcoin's 14-day rally, its second-longest Ever, a bull market Trap?"

  Mary Liu, BitpushNews

Over the past 24 hours, bitcoin's rally has waned to trade below $21,500, with a 24-hour volatility of less than 1 percent. Bitcoin's current rally is the result of widespread optimism following a cooling of U.S. inflation, with the possibility of a slower Fed rate hike blowing away the bearish gloom of 2022. In terms of the current rally, bitcoin has surpassed its pre-FTX crash levels, as well as driving optimism in the industry that more institution-led investors could move in.

According to data published by Documenting Bitcoin on January 17, bitcoin has risen for 14 days in a row, surpassing the 10-day winning streak in July 2020 and September 2017, and is just one day away from setting a historic new record, The longest streak was 15 days in November 2013.

Is it a bull market trap?

The market is now focused on whether bitcoin can continue to break out and then regain its 2021 highs.

PlanB, a quant with 180W+ Twitter followers, said the recent bitcoin rally is not a "bull market trap" that many investors loathe. He argues that several benchmarks suggest that what many consider a bull market trap is actually the start of a new bull cycle. The rise in the relative strength index (RSI) suggests bitcoin is bullish, although the RSI is still trading at historic lows seen in 2015 and 2019.

PlanB's analysis says bitcoin has found the bottom of the current bear market cycle, doubling from his previous position of $15,500 in November 2022. He predicts the next halving event in 2024 will push bitcoin to $32,000. He said: "BTC was correlated with S&P (and other assets) from the start. The difference is that if S&P rose, BTC rose much more. In the chart below, S&P jumped from about 1,000 to 4,000, while BTC jumped from about 1 to 20,000. The historical price correlation between the S&P 500 and bitcoin suggests that BTC has more room to climb. BTC is playing catch-up with S&P (which implies a BTC price of $54,000)."

Senior market analyst Jim Wycoff said bitcoin bulls now have a firm grip on the asset after weeks of battling with bears. "Looking at the daily chart, the bulls have the overall advantage, which suggests there is more room for gains in the near term," Wycoff wrote.

Cryptocurrency trading expert and analyst Michal van de Poppe said bitcoin liquidity has surpassed recent highs.

Technical analysis from TradingView also shows bullish momentum for bitcoin. The daily composite index is at 15, indicating a "buy" sentiment, while the moving average indicator is 13, indicating a "strong buy," and the volatility indicator is 4, indicating a "sell."

Recession worries

Fears of a looming recession could weigh on the crypto market. Many business leaders are predicting a sharp slowdown in global economic growth over the next 12 months, with 73 percent of 4,410 business leaders surveyed by accounting firm Pricewaterhousecoopers in October and November expecting global growth to decline over the next 12 months, Bloomberg reported. This is the worst reading since the consultancy began its survey in 2011. A separate survey of chief economists published by the forum found that two-thirds expected a global recession in 2023 as companies cut costs; Eighteen percent said such a downturn was "very likely."

Some Macro analysts, like Andy Constan, CEO of Damped Spring Macro Research, are skeptical that the Fed can pull off a "soft landing" and avoid a recession, In her recent Forward Guidance podcast, Constan advised investors to short stocks and bonds, including fellow risky assets like cryptocurrencies.

Since the rally in early January, many investors have been hoping for safety. According to charts shared by Santiment, profit taking in bitcoin rose to levels last seen in February 2021, while Ethereum surged to levels last seen in October 2021, the year when the crypto bull market peaked and triggered massive profit taking, suggesting investors were less confident the rally would last, Could have a serious impact on the mini-bull market currently under way.

In its report, Glassnode, an on-chain analytics firm, advises investors To take a "wait and see" approach when discussing how long the rally might last. In a January 17 Twitter poll, 37% of nearly 1,500 users said bitcoin would continue to rise "To the Moon," Another 22 percent of voters fear the current bullish sentiment will reverse and end in a 'total crash,' while 31 percent say it will continue to move sideways.

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