The upswing in the price of the top two cryptocurrencies has confused traders as they are trying to determine whether a rebound is imminent or if a further slump is on the cards. Digital assets have been swamped by higher interest rates and a downturn in the crypto industry following the Terra LUNA crash, and the collapse of Three Arrows Capital (3AC) and FTX crypto exchange.
BTC price has risen 38% so far this month and graced $23,000, its highest price since August 2022. Ether has also risen 38% and is trading at $1,635. Data graphs and charts show that cryptocurrency prices gained traction in anticipation of an economic report that stated that inflation cooled in December 2022.
As such, investors and traders are hoping that the Federal Reserve will raise interest rates less aggressively than they have in the past year. However, crypto analysts have sounded cautious. They believe the surge in crypto prices is too good to be true and described it as a bull trap. The analysts fear a breakout will crash down and burn traders who mistook it as the beginning of a new trend.
Il Capo of Crypto, a popular crypto analyst, warned that the rally looks manipulated as there is no real demand. He said it is the biggest bullish trap they have ever seen. Jim Cramer, the host of Mad Money, also sees the uptick in the crypto market as a manipulation. He said this is evidence that digital assets are a sham market.
But crypto enthusiasts will have none of it. They are very much hopeful that the market is recovering.