Did the recent crypto crash inevitably happen? Or was it developed? Is the bull market over for good? Or is the market gaining momentum and preparing for big moves? Your guess is as good as ours, but Moonrock Capital’s Simon Dedic thinks weak hands caught her foot in a bear trap. Once again they fell for the trick of a rich man.
Before we investigate the case further, let’s make sure we’re on the same page by consulting Investopedia’s description of what happened in a bear trap:
In order to increase demand and make stock prices rise, institutions could lower prices to make the markets look bearish. This leads inexperienced investors to sell stocks. Once the stock falls, investors bounce back into the market and stock prices rise as demand increases.
And let’s read exactly what Dedic said:
I tend to believe that this was just a massive bear trap. $ BTC up to 100,000 and $ ETH up to 9,000 are still possible for me.
– Simon Dedic (@scoinaldo) May 25, 2021
So, were the vendors played? Let’s find out.
Related reading | The level bitcoin bulls have to reclaim to defend the worst monthly sell-off ever
Where were we before this possible bear trap?
Just a month ago, Bitcoin went through a long period of consolidation and Ethereum was booming. The “flippening” narrative returned and all eyes were on the upcoming hard fork “London”, which will turn ETH into a deflationary asset. Then the crypto crash happened. And of course NewsBTC reported about it:
A week ago, Ethereum was at a high level after hitting a new all-time high of $ 4.4,000. Since then, ETH has been on a downward trend, and it got worse because of the crypto crash. At the height of the panic selling, the price of Ethereum dropped to $ 1.9,000 before rising again. That’s a 57% loss from the all-time high.
The situation doesn’t look so hopeless at the moment. Ethereum is on an uptrend and each coin is priced at $ 2.813 at the time of writing.
ETH price chart on Kraken | Source: ETH/USD on TradingView.com
Where are Ethereum and Bitcoin right this minute?
The market looks healthy, even if it took a hit over the weekend. Both cryptocurrencies are slowly gaining traction at a comparable rate. The ride feels stable now and we all know what that means … surprises ahead of us. Coindesk has Steven McClurg, CIO at Valkyrie Investments, predicting what those surprises might be:
“Because of the law of large numbers, it takes many more users today than it did a year ago to increase activity on the Bitcoin network enough that the price increases,” said McClurg. “The ETH is gaining in importance, as the ETH 2.0 and those who put their assets into the network in anticipation of proof of their use, switch off the supply when demand rises.”
Is he right So far statistics and diagrams do not show this. In fact, the trends are exactly at the same level as they were when our sister site Bitcoinist broke the flip:
Ethereum still has around 40% of Bitcoin’s market capitalization. And the percentage is exactly the same when we compare the active nodes. It has already outperformed BTC in everything to do with transactions, from the amount to the fees generated. And ETH is not even close in terms of Google search interest and active addresses.
Related reading | TA: Ethereum faces hurdles, here’s what could spark a strong rebound
Further information on the statistics can be found here.
The Flippening, Market Cap chart | Source: Blockchain Center
Are we then caught in a bear trap?
When we’ve done that, we’re still there. So we don’t yet have the perspective to make a call. However, certain indicators point in this direction. For example, this crypto enthusiast appears to have identified a historical pattern:
#Bitcoin Macro Bull Cycles
2011: – Duration 9 months (after previous ATH) – Bear trap in month 6
2013: – Duration 9 months – Bear trap in month 5
2017: – Duration 9 months – Bear trap in month 6
2021 / Now: We are in month 6
– CryptoAmsterdam (@damskotrades) May 21, 2021
And this whale is undecided but hopeful:
I’m not ready to rule out the possibility that we’re anywhere here: pic.twitter.com/mXLVq3hfez
– Wal (@elwhale) May 24, 2021
In any case, bear traps only catch amateurs. This has nothing to do with a person with diamonds like you. Still, it’s nice to know where we stand. Or at least to theorize about it.
So $ BTC to 100,000 and $ ETH to 9,000? Definitely possible for us.
Featured Image by Kaylyn Mok on Unsplash - Charts by TradingView