Will Market Makers Dump Bitcoin Again in 2021?

A volatile and faith-based market like Bitcoin is heavily influenced by emotions. When the irrational exuberance dies down, so does the value of Bitcoin. Competing currencies like Bitcoin also pose a threat to government control over their own currency and economy, thereby facing pressure from regulatory bodies.

For me, Bitcoin is a passing fad. If you have money in it and are making a profit, take it and run. If you stand to lose money, your first loss could be your best loss. This is just my opinion.

The Current Bull Market in 2021

Currently, we are experiencing what people call a bull market in 2021, matching the halving cycle of Bitcoin. This bull market typically occurs every four years and precedes what is expected to be a bear market following the halving. During the bear market, volatility is expected to decrease, and the prices of major altcoins will drop.

You can explore the current market trends on CoinMarketCap for more information.

Warning Signs and Bull Traps

At lower levels, markets can create false up-moves, leading investors to believe that the long-term trend has turned bullish, a phenomenon known as a bull trap. This recent up-move can be attributed to Twitter’s CEO endorsing Bitcoin as a promising future asset, and the recognition that governments may struggle to clamp down on such investments.

The current price structure shows that while Bitcoin is not gaining much traction, high-utility altcoins are currently picking up. This has led some altcoins to rally again, inspired by how quickly the massive selloff in stocks was recovered within a few days. With cryptocurrencies already trading at a 50% discount, they too have started to rally.

Market Makers and the Sideways Market

Market makers will always shake out those who hold on loosely, paving the way for a new bull run. For now, I expect a sideways market. A short-term bear trend will be over if Bitcoin closes above 36,000 and holds that level on a retest. Once this happens, a new bull run will likely begin.

Buying in small volumes remains key, as many were caught off guard during the recent drop. Keep an eye on the market trends and prepare for the potential changes ahead.