Bull trap? Relief rally? Cryptos gain, but some traders remain cautious
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Cryptos are bouncing back after three days of declines, with Bitcoin moving above $50,000 for the first time since Saturday’s flash-crash, but veteran traders are warning that further declines aren’t out of the question.
The Fear & Greed Index still was at a 25, a read of “extreme fear,” although up somewhat from yesterday’s four and a half month low of 16.
On Crypto Twitter, there was a mix of caution and optimism. One said it’d take a close above $53,000 on a daily/weekly timeframe for him to start feeling bullish, otherwise he expected more rangebound action.
I feel like this is just a bull trap tbh
— KSICRYPTO (@ksicrypto) December 6, 2021
— Lark Davis (@TheCryptoLark) December 7, 2021
Just note that this is a relief rally. Those mofos wouldn’t let us have a life. When it’s time take profits and dca when it’s lower. Bullish on a HTF. But expect some fuckery up and down for few weeks
— Vivian (I don’t DM you) (@blockchainedbb) December 6, 2021
Been a pretty heavy buyer of BTC and ETH over the last 24 hours.
Time to panic was weeks ago.
— light (@lightcrypto) December 6, 2021
Analyst Bitcoin Charts said while Bitcoin was moving higher in price, it was setting a lower high on two technical indicators known as the MACD and RSI.
“This is a bearish divergence, which signals a possible trend reversal down,” he wrote.
“The higher the timeframe, the more significant the divergence – it’s possible we’re in a bear market. ”
Aussie trader Kyle Stagoll, who told Stockhead yesterday that he thought there could be two months of sideways action similar to June and July, posted in his Crypto Paradox Facebook group that people shouldn’t be getting too excited for awhile yet.
“Still alot of resistance overhead we need to get through before we safe,” he wrote. “Above 61k looks good until then its dicey.”
At lunchtime (Sydney time), Bitcoin was trading at US$50,826, up 3.8 per cent from yesterday, while Ethereum was changing hands for US$4,370, up 5.0 per cent.
The overall crypto market was at US$2.37 trillion, up 4.6 per cent from 24 hours ago.
All of the top 100 coins were up aside from Immutable X and XDC Network, which were down 3.4 per cent and 2.7 per cent, respectively. (Stablecoins were also down marginally).
BitTorrent was the biggest gainer in the top 100, rising 38 per cent to 0.3c after announcing the BitTorrent mainnet chain would go live next week and tokens would be redenominated at a 1:1000 ratio.
The token is used to power the peer-to-peer file-sharing BitTorrent network, which Tron founder Justin Sun purchased for $140 million in 2018.
The second-biggest gainer in the top 100 was Bitcoin SV, which rose 24.8 per cent to US$148.65 after a Florida jury mostly ruled in favour of Aussie developer Craig Steven Wright in a civil case brought by the estate of his friend David Kleiman.
Loopring, Basic Attention Token, Polygon and Avalanche had also posted strong gains of between 14-23 per cent.