Despite the recovery of the Bitcoin price above the crucial $90,000 threshold – a level that has historically served as a supportive bottom for the cryptocurrency – the market is showing signs that a further correction is imminent.
Bitcoin Price Recovery in Danger?
Market expert Rekt Fencer recently shared insights on social media platform suggestive that the Bitcoin price could form what he calls a “massive bull trap.”
This term refers to a deceptive bullish signal where the price briefly crosses a resistance level, in this case the $90,000 mark, and then reverses into a decline. Such moves can trap investors who buy during the peak, leading to significant losses.
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Fencer pointed out a disturbing pattern reminiscent of early 2022, when Bitcoin regained its value 50-week moving average (MA) – currently positioned above $102,300 – before experiencing a severe decline of around 60%, plummeting below $20,000 in June of that year.
He indicated that the recent price recovery after a big drop to $84,000 should not be interpreted as a signal of short-term success, especially since the Bitcoin price is currently trading below the 50-week MA.
If historical trends repeat, it could mean that Bitcoin could see a significant drop, possibly around $36,200, which could potentially represent a price low. bearish cycle for the cryptocurrency. On the other hand, there are analysts who remain optimistic.
BTC bottom in sight?
Market researcher and analyst Miles Deutscher expressed a confident sentiment, saying that he believes based on his analysis of key developments, there is a 91.5% chance that the Bitcoin price has bottomed out.
He noted that recent weeks have been dominated by negative news stories, including concerns around Tether (USDT) and the implications of China’s moves in crypto, which he said often mark local price floors.
Additionally, Deutscher pointed to a shift in market flows from mostly bearish to bullish. He explained that the trading environment has recently seen a revival buying momentumwith major investors, or ‘OG whales’, halting their sales. This change is reflected in the order books, indicating a possible stabilization of market sentiment.
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Furthermore, the liquidity landscape appears to be changing, with market conditions having tightened in recent months. The possible appointment of a new Federal Reserve chairman, known for his accommodative policies, coupled with the official end of quantitative tightening (QT), could further sway market dynamics in favor of buyers.
Deutscher concluded by emphasizing the fact that given the extreme levels of fear, uncertainty and doubt (FUD) in the market, combined with improvements in trade flows, he believes the odds favor the idea that the Bitcoin price has indeed bottomed out.
Featured image of DALL-E, chart from TradingView.com