Similar to Stockholm Syndrome, where captives develop a psychological bond with their captors, crypto winters have a way of knocking even the most bullish cryptocurrency proponents down in a short time.
Proof of this reality was fully exposed on July 19 after Bitcoin (BTC)’s rally above $23,000 was met with widespread warnings that the move was just a fake before the market is heading for new lows.
Not bad. But keep in mind that this can still turn into a faux classic.
My general thesis still remains, bear market rally pic.twitter.com/VxnH4mo6hW
— Jimie (@Your_NLP_Coach) July 19, 2022
While the possibility of new lows being set in the future cannot be ruled out, here is a look at analysts’ views on how this BTC breakout could be different from what most investors expect.
This time “it’s different”
The pointed message of “this time is different” was offered by pseudonymous Twitter user Trader XM, who job the following chart explaining why BTC is about to go higher.
As shown in the chart above, BTC price has not retested the low of the range even though four retests of the high of the range have taken place, suggesting that the buyers are now stronger than the sellers.
In response to Trader XM’s post, Twitter user Justiinape replied “$27,000-28,000 seems imminent.”
XM Trader said:
“Okay mate, move to $27-28k then months of consolidation. Let’s take advantage of this move before the long hibernation.
The next major resistance is at $27,100
Further evidence that BTC could go higher was provided by on-chain data company Whalemap, which job the following chart highlighting the lack of buying demand between $23,000 and $27,000.
“$27,100 should be the first resistance on our path. Large supply gap between current prices and $27,000.
Related: Bitcoin Price Moves Towards $24,000 and Traders Expect Further Rise, After Retest of Support
Shorts get REKT
Evidence that crypto traders had been lulled into an overly bearish outlook came from cryptocurrency analyst Dylan LeClair, who job the following chart showing the effect Bitcoin’s move above $23,000 has had on futures traders.
As shown on the chart, a large number of short Bitcoin positions were opened between June 15 and July 15, and these traders now find themselves on the losing side.
“Tens of thousands of BTC short open interests currently underwater.”
Although Bitcoin will reverse course and head lower again remains a possibility, the current momentum suggests further upside in the near term.
The overall cryptocurrency market capitalization now stands at $1.055 trillion and Bitcoin’s dominance rate is 42.1%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.