Although Bitcoin has recovered above the significant $90,000 level—a threshold that historically acts as a support for the cryptocurrency—the market displays indications that another correction might be on the horizon.
Is the Bitcoin Price Recovery at Stake?
Market analyst Rekt Fencer recently shared observations on social media platform X, previously known as Twitter, indicating that Bitcoin’s price may be setting up a “massive bull trap.”
This term describes a misleading bullish signal where the price briefly exceeds a resistance level, in this case, the $90,000 mark, only to retrace and decline. Such movements can ensnare investors who entered during the peak, leading to substantial losses.
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Fencer highlighted a concerning pattern reminiscent of early 2022 when Bitcoin reclaimed its 50-week moving average (MA)—currently situated above $102,300—before undergoing a drastic decline of approximately 60%, falling below $20,000 by June that year.
He suggested that the recent recovery after significant drops to $84,000 shouldn’t be viewed as a sign of imminent success, especially as Bitcoin is currently trading below the 50-week MA.
Should historical patterns repeat, this could imply a notable downturn for Bitcoin, potentially dropping to around $36,200, which might mark the low of the bearish cycle for the cryptocurrency. Conversely, some analysts maintain a bullish outlook.
Is BTC’s Bottom Near?
Market researcher and analyst Miles Deutscher expressed a confident sentiment, asserting he believes there is a 91.5% chance that Bitcoin has hit its lowest point, based on his analysis of critical developments.
He pointed out that the recent weeks have been filled with negative news, including concerns about Tether (USDT) and China’s influence on crypto, which often coincide with local price bottoms.
Furthermore, Deutscher observed a shift in market dynamics from predominantly bearish to bullish. He explained that the trading environment has seen a revival in buying momentum, with large investors, or “OG whales,” halting their selling activities. This change is visible in the order books, suggesting possible stability in market sentiment.
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Additionally, the liquidity landscape seems to be changing, with market conditions tightening recently. The potential appointment of a new Federal Reserve chair known for dovish policies, along with the formal conclusion of quantitative tightening (QT), could further impact market dynamics favorably for buyers.
Deutscher concluded by stressing that, given the extreme levels of fear, uncertainty, and doubt (FUD) in the market, paired with improvements in trading dynamics, he believes the odds lean towards the idea that Bitcoin has indeed reached its bottom.
Featured image from DALL-E, chart from TradingView.com
