Traders could be in for a rude shock if technical candlestick arrangement visible in Bitcoin, Litecoin, Ethereum, and Ethereum Classic charts is leading.
Despite posting double-digit gains in the last couple of weeks and resuming their uptrend, there are hints that accompanying trading volumes are low and fizzling out even as prices print a series of higher highs.
BTC, ETC, BCH, ETH Post Superior Gains
Presently, Bitcoin is the most watched and the most valuable coin by market cap has soared past $9,000 much to the excitement of the masses. For comparison, BTC is up 4% in 24 hours and 22% in the past trading month.
Similarly, LTC and ETH traders are upbeat at the back of improving sentiment. Meanwhile, ETC has roared back to life and after the initial take off to the top 10, price action has cooled off and but the coin is nonetheless lodged at 12th in terms of market capitalization.
However, what is visible and most talked about is ETC’s 130% rally in the past 30 days of trading.
A Bull Trap in Waiting
Therefore, while the market is bullish and expecting further surges going forward, sirens have been sounded by one technical analyst.
He notes that despite the recent bull run, accompanying trading volumes are low, and this is most probably a bull trap.
A bull trap is a chartist term to mean the lack of a follow through by buyers despite convincing breakouts above critical resistance zones. It is basically a false buy signal.
BTC is trading above $9,000, ETH above $160, LTC above $50 and ETC above 10.
“BCH, LTC, BTC, ETH: Last few days pump could be bull trap, here’s why Wave 3 has very high volume Wave 5 makes HH (Higher High) with lesser volume (LL) + lower RSI (red line) After wave5, the corrective bounce (B wave) makes LL (Lower Low) on volume & RSI (blue line).”
Wave 3 has very high volume
Wave 5 makes HH (Higher High) with lesser volume (LL) + lower RSI (red line)
After wave5, the corrective bounce (B wave) makes LL (Lower Low) on volume & RSI (blue line)
— Keshav R Narla (@imkeshav) January 28, 2020
Vitalik is Confident
These levels were critical resistance levels now turned support. Going forward, traders may consider exiting their longs in light with these developments.
In that case, ETC traders may post double gains while ETH, as they develop their network and Vitalik Buterin exudes confidence in the state of the network, traders may consider caution.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich