Bitcoin's price recently surged above $60,000 for the first time in 10 days, reaching $63,000.
Some analysts believe this is a real bull sign, while others fear a bull trap.
Despite the price increase, trading volume remains low, which some analysts find concerning.
Big investors have been buying Bitcoin heavily recently, possibly indicating a market bottom.
Smaller investors have been selling their Bitcoin holdings during the recent price dip.
More eyes are on Bitcoin today than ever before, considering how it broke above the $60,000 mark and hit a 10-day high of $60,400 on 14 July before coming to rest at around $63,000 on 15 July.
This price surge comes amid several market events during the previous week, including Germany's sell-off completion and a very interesting assassination attempt on United States presidential candidate Donald Trump.
Here are some of the reasons why the ongoing rally might be legitimate or a massive bull trap just waiting to happen.
In addition to being one of the most important psychological resistances on Bitcoin's chart, analysts have highlighted the significance of Bitcoin's position above and why the cryptocurrency must avoid any breaks below.
During the cryptocurrency's initial rally over the weekend, analyst Crypto Tony pointed out that a break above the $60,500 zone would be a “real sign of strength” for the bulls.
This sentiment was echoed by Rekt Capital, who stated that Bitcoin needed to complete this break to "protect the ReAccumulation Range."
And Bitcoin did break above.
According to data from CoinMarketCap, Bitcoin is doing very well for itself and is attempting to solidify its position above the $63,000 zone.
This is the bull market. Sudden and unexpected movement in any direction is entirely possible under the right conditions.
Because of this, several analysts remain cautious of a possible bull trap
Analysts like Daan Crypto Trades find some suspicious things about the ongoing market conditions.
In a recent tweet, the analyst wondered why the liquidity and trading volumes were at lows despite Bitcoin's ongoing bullishness.
Bitcoin went from $60,000 to $63,000 in less than 24 hours between 14 and 15 July.
However, the trading volumes for the cryptocurrency are only up by less than 25%.
According to the analyst, this might mean that Bitcoin's price action is leading to a scenario where market participants will become sidelined.
In essence, Bitcoin’s price is going up, but some of the most important metrics aren’t.
According to data from CryptoQuant and IntoTheBlock, the Bitcoin whales are buying massively
IntoTheBlock notes that in the last 30 days, the whales have raked in a staggering 71,000 Bitcoin worth $4.3 billion at current prices.
CoinGlass data, on the other hand, shows that this is the fastest accumulation rate these whales have exhibited since April 2023, when there was one of the most massive Bitcoin slumps.
This means that the whales last accumulated Bitcoin this quickly after the collapse of the Silvergate bank in 2023.
Additionally, it can be one of the incoming signs of a market bottom, and Bitcoin's price action might not be a bull trap after all.
On the flip side, Santiment data shows that while these whales have been accumulating, the smaller shrimp and fish have been selling their holdings massively during the dip.
This shows a stark contrast between both cohorts of Bitcoin investors, considering how Santiment notes a net increase of 261 Bitcoin wallets holding at least 10 Bitcoins over the first ten days of July.
Overall, Bitcoin is still down by around 5% over the last month and by 15% from its all-time high of $73,800.
Is this a legitimate move to the upside, or is something ultimately bearish at play?
Only time will tell.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.