Bitcoin “has set a bullish trap for investors” and will return to falls

Experts believe that the current environment precludes a further rebound

Risk aversion strikes back in the stock markets that this Wednesday have again suffered significant sales after the statements of the president of the Federal Reserve (Fed), Jerome Powell, showing his determination to curb inflation. Wall Street took a hard hit with a 4% drop for the Nasdaq -which lost its support of 12,100 dollars, which has affected bitcoin and cryptocurrencies, whose evolution in the markets goes hand in hand with the New York Stock Exchange. York. However, these assets have withstood the downward pull, which entails serious risks according to experts.

Satoshi Nakamoto’s brainchild is back below $30,000, “which may make some a little nervous,” says Oanda analyst Craig Erlam. He believes the expert that “it is difficult for risk assets to take advantage of the rally in the current environment in a meaningful way”. However, for some this is encouraging as “we have not seen a sharp reaction to moving below such a key level”. “Of course, that could change quickly as underneath it seems to offer the path of least resistance” with a control zone at 25,000-26,500 and below $20,000.

In general, the activity in the digital currency market has continued to decline and this Wednesday there has been a lower volatility than the monthly average, comment Rabobank experts. The total capitalization is lower than in previous days and settles around 1.4 billion dollars. As for other tokens, Ethereum has broken out of the $2,000 level.

In this context, there is no shortage of warnings from analysts who believe that the digital asset is simply waiting to start its next bloodletting. Popular bitcoin critic Peter Schiff calls this a classic bull trap for investors. In one of his recent Twitter posts, Schiff mentions:

“I must admit I’m surprised bitcoin has held up so well. But don’t get cocky #HODLers. The market never gives investors that much time to buy dips. This is more likely a bull trap to attract so many buyers as possible before the next major leg down.”

He continues: “Rising #grocery and gas prices will put more pressure on bitcoin prices. That’s because groceries and gas stations won’t exchange their food or fuel for bitcoins. So if Bitcoin #HODLers they want to eat and drive they will soon be forced to sell their precious ‘stash’ in order to afford it.” This will ultimately mean that bitcoin could crash even below $20,000.