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Bitcoin Gold Busts to the Upside, But Bulls Shouldn't Be Trusted

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@cryptominaty
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Bitcoin Gold price has been outperforming in the crypto market, rallying nearly 40% in the last 24 hours.

As volatility subsides from the crypto market, some small-cap coins have been seizing the moment to gain prominence. Such is the case of Bitcoin Gold, who has already gained about 40% during the current day. At the time of writing, BTG is trading at $25.24, accumulating a 38.16% gain in the last 24 hours. With a market capitalization of $461 million, it ranks 95th in the CoinMarketCap ranking. The exact catalyst behind the sharp rise in this coin is unknown; however, various analysts agree that these types of low-volume rallies are usually bullish traps, driven by few traders and investors. While the several hundred million this cap coin has may seem high, actually in the crypto space this is an easily manipulated size.

Bitcoin Gold Technical Analysis

Even though we saw a significant rally, still for the weekly BTG vs USDT chart it is not too significant. In this time frame we see a strong short/medium-term downtrend, which has remained intact since the beginning of May 2021. While this drop may look like a correction after a strong push to the upside, we still don't see a confirming signal that the bottom has been reached. At the moment, the price of Bitcoin Gold remains locked in a strong descending channel, and the recent rally seems to be a mere respite before continuing in this previous direction. Breaking through the top of this channel would be a good sign for the bulls. With this, new higher lows would begin to form.

Daily chart

In the daily time frame, we can see excellent behavior, thanks to the rally that occurred today. However, after gaining resistance at $31.50, the price started to give off a strong bullish rejection. Right now the short-term trend is up, due to the rally we are seeing. If the price manages to make a new higher low in the next couple of hours, then we could continue to see more buying in the near future. But as we saw on the weekly chart, it doesn't seem like a move to be too confident about.

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