• Bitcoin (BTC) recently experienced a strong price pump to kick off the new year, but many industry pundits are not convinced it will continue its upward trajectory.
• James Edwards — a cryptocurrency analyst at Australian-based fintech firm Finder — argued that the surge could be short-lived, since the BTC price moved upwards over the weekend, but the NASDAQ Composite and S&P 500 also made similar rallies.
• Edwards also mentioned that there are still some “significant hurdles to clear before a new bull market can begin,” such as the continued fallout over FTX’s collapse and the Genesis Chapter 11 filing.

The cryptocurrency market experienced a strong surge this month as Bitcoin (BTC) nearly broke its record for the longest streak of daily green price candles. While many investors have been celebrating this development, others are more skeptical of the rally and believe it could be short-lived.

James Edwards, a cryptocurrency analyst at Australian-based fintech firm Finder, believes the argument for a “bull trap” is stronger. He argued that the BTC price moving upwards over the weekend was part of a wider market uplift as inflation figures stalled and a risk-on appetite appeared to return to investments.

“This suggests to me that the rally in crypto is not unique, and instead part of a wider market uplift,” said Edwards. “So Bitcoin is just enjoying the effects of positive sentiment that originated elsewhere. This is likely to be short-lived.”

Edwards also mentioned that there are still some “significant hurdles to clear before a new bull market can begin”, such as the continued fallout over FTX’s collapse and the recent Chapter 11 filing by Genesis on Jan. 19. He believes these events will likely lead to further sell-offs and downsizing in the cryptocurrency markets, making it difficult for the current rally to be sustained.

The analyst also noted that Bitcoin is currently trading at its highest point in more than two years, which could indicate that the current market cycle is nearing its peak. He added that the longer the rally continues, the more likely it is to be met with a strong corrective move.

Overall, Edwards believes that while the current Bitcoin rally is welcome news, investors should remain cautious and not get too excited by the recent surge. He concluded that while there are some positive signs, the cryptocurrency markets still have some significant challenges to overcome before a new bull market can begin.