Bitcoin: Recent Surge Could Be a Trap, According to Crypto Analyst
Nicholas Merten, the widely-followed crypto analyst and host of DataDash, is reportedly shorting Bitcoin (BTC) after the cryptocurrency's price surged by roughly 100% since November.
Merten believes that Bitcoin’s recent price surge is a relief rally trap fueled by “over-exuberance” spreading through the crypto markets.
According to him, Bitcoin is currently facing resistance in the range of $29,000 to $32,000, which could cause its value to decline soon. He plans to short Bitcoin, waiting for the right setups to come his way.
Merten warns against comparing the current situation to Bitcoin’s 2019 price action, which saw a 300% rally in a few months. He thinks it’s unlikely that Bitcoin will follow the same hyperbolic, fast recovery it experienced during the last cycle.
In his opinion, a more relevant comparison is the same relief rally trap that occurred during this bear market.
Merten believes that Bitcoin is most likely following a similar pattern to what happened in June 2021, when it began a rally to a new all-time high and then collapsed.
He notes that Bitcoin rallied by 139% within 20 weeks, only to fall back down when everyone was convinced of the supercycle, the dollar collapsing, and Bitcoin being the super asset that would go towards $100,000. Afterward, Bitcoin entered a brutal bear market that lasted for months.
At the time of writing, Bitcoin is trading at $30,470, down roughly 1.50% in the last 24 hours.