Here’s why analysts are cautious of Bitcoin despite today’s insane rally

Here’s why analysts are cautious of Bitcoin despite today’s insane rally

Bitcoin’s bulls have been able to greatly extend the momentum that they first generated when BTC tapped lows of $6,400, with this momentum reaching a fever pitch this afternoon as the crypto surges up towards the key $8,000 resistance level.

It is important to note that some analysts are expressing caution about getting too excited about today’s movement, as it is possible that this will ultimately be just another fleeting rally that is closely followed by a sharp retrace.

Bitcoin Surges Towards $8,000 as Markets are Ablaze with Excitement

At the time of writing, Bitcoin is trading up 4.5 percent at its current price of $7,750, which marks a notable climb from its recent lows of $7,400 that were set yesterday morning.

Today’s movement towards $8,000 signals, in the eyes of many investors, that the cryptocurrency’s recent lows of $6,400 could mark a long-term bottom, and many analysts have been closely watching to see if BTC is able to validate a recently formed inverse head and shoulders pattern.

Further adding to the growing bullishness amongst investors and analysts is the fact that BTC is close to posting an EMA bull cross, which is a technical signal that historically is followed by immense bullishness.

Big Cheds, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, pointing to a chart that shows the aforementioned EMA cross.

“BTC Bitcoin Daily chart breaking out, flirting with an upcoming 8/34 EMA bull cross (green and yellow lines),” he noted.

Bitcoin BTC
Image Courtesy of Big Cheds

Is It Too Early to Get Bullish on BTC? 

In spite of overt bullishness, it is important to note that Bitcoin has experienced a series of rallies over the past few weeks that have been followed by massive retraces, and it is too early to say that this time is any different.

Cantering Clark, another popular crypto analyst on Twitter, spoke about this in a tweet, while pointing to a chart that shows the multiple fleeting rallies that BTC has experienced over the past couple of weeks.

“Try not to lose your minds yet people. The market is meant to get you extremely bullish when it is expensive, and extremely bearish when it is cheap. Same idea works in 1460$ ranges. Anyone who buys up here for any reason other than long term holdings is COO COO. BTC,” he explained.

Bitcoin BTC
Image Courtesy of Cantering Clark

Whether or not the ongoing rally is truly a sign that further bullishness is right around the corner remains to be seen, but the coming few hours and days will likely prove to be highly elucidating for investors.

Bitcoin | BTC

Updated: Jan 7 at 2:40 am UTC

Bitcoin, currently ranked #1 by market cap, is up 5.56% over the past 24 hours. BTC has a market cap of $143.8B with a 24 hour volume of $25.01B.

Chart by CryptoCompare

Bitcoin is up 5.56% over the past 24 hours.

Posted In: , Analysis, Price Watch
Invest with AMFEIX

Like what you see? Subscribe to CryptoSlate

Get our daily newsletter containing the top blockchain stories and crypto analysis straight to your inbox.

Sign up to stay informed
Cole Petersen

Cole Petersen

Contributor @ CryptoSlate

Cole is a freelance journalist based in Southern California, where he’s an undergraduate at the University of California, Irvine, studying philosophy. He focuses primarily on covering cryptocurrency and blockchain-related news. He owns a non-life-changing sum of Bitcoin and enjoys day trading.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.