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The crypto market extended its surge into the third day; as usual, short sellers took a hit, with $1.24 billion of short positions liquidated in 24 hours.
At the time of writing, Dogecoin was trading up 10.11% in the last 24 hours to $0.0842 and up 21.33% weekly. The dog coin has risen for a third straight day, from a low of $0.069 on August 19 to an intraday high of $0.0857 early Friday.
Several other crypto assets were posting double-digit gains on both daily and weekly timeframes. XRP was up 24% on a daily basis, while Zcash and Bitcoin Cash posted gains of 18% and 21%, respectively.
Amid the ongoing market surge, vocal Dogecoin community member Mishaboar issued a warning for participants. "It is good to see the market moving in a different direction, but be extremely careful," he warned.
This warning suggests the possibility that the current move could turn into a bull trap, a market scenario in which prices rise convincingly enough to attract bullish positions before reversing sharply lower.
Potential bull trap?
Mishaboar questioned the circumstances surrounding the latest market rally, saying he will not put too much trust in a rally associated with a 'high-profile crypto conference'. A White House event on Wednesday had executives from Coinbase, Gemini, Ripple, and Chainlink in attendance, with crypto rallying afterward.
However, cryptocurrencies are rallying alongside hard assets like gold, while the dollar is depreciating against major currencies. This suggests that factors beyond those mentioned by Mishaboar may have contributed to the crypto market rally.
The Treasury is expected to double its buybacks of long-term U.S. bonds to at least $4 billion per operation through early November. While the Treasury's latest move appears to be driving the bullish sentiment in the market, the unwinding of short positions is adding further fuel to the rally.
Going forward, overbought signals will be watched in the market to determine a potential reversal.
U.Today Editorial Team
Dan Burgin
