Bitcoin Price Faces Potential 60% Decline As Expert Warns Of ‘Major Bull Trap’

[Ben Graham]

Despite the Bitcoin price recovery above the crucial $90,000 threshold—a level that has historically served as a supportive floor for the cryptocurrency—the market is exhibiting signs that a further correction may be imminent. 

Bitcoin Price Recovery At Risk?

Market expert Rekt Fencer recently shared insights on social media platform X, formerly known as Twitter, suggesting that the Bitcoin price might be forming what he calls a “massive bull trap.” 

This term refers to a deceptive bullish signal in which the price briefly surpasses a resistance level, in this case, the $90,000 mark, only to reverse into a decline. Such movements can entrap investors who bought in during the peak, leading to significant losses.

Fencer pointed out a troubling pattern reminiscent of early 2022 when Bitcoin reclaimed its 50-week moving average (MA)—currently positioned above $102,300—before experiencing a severe decline of roughly 60%, plummeting below $20,000 by June of that year. 

He indicated that the recent price recovery following major drops to $84,000 should not be interpreted as a signal of near-term success, especially since the Bitcoin price is currently trading under the 50-week MA.

If historical trends repeat, this could mean that Bitcoin might see a significant drop, potentially reaching around $36,200, which could potentially represent the low point of the bearish cycle for the cryptocurrency. On the other hand, there are analysts who retain a bullish outlook. 

BTC Bottom In Sight? 

Market researcher and analyst Miles Deutscher expressed a confident sentiment, stating he believes there is a 91.5% likelihood that the Bitcoin price has hit its bottom, based on his analysis of key developments. 

He noted that recent weeks have been dominated by negative news stories, including concerns surrounding Tether (USDT) and the implications of China’s actions on crypto, which he asserts often mark local price bottoms.

Moreover, Deutscher pointed out a shift in market flows from predominantly bearish to bullish. He explained that the trading environment has recently seen a resurgence in buying momentum, with large investors, or “OG whales,” ceasing their selling. This change has been reflected in the order books, indicating a possible stabilization in market sentiment.

Additionally, the liquidity landscape appears to be shifting, with market conditions tightening in recent months. The potential appointment of a new Federal Reserve chair known for dovish policies, coupled with the official end of quantitative tightening (QT), could further influence market dynamics in favor of buyers.

Deutscher concluded by emphasizing that given the extreme levels of fear, uncertainty, and doubt (FUD) in the market, combined with improvements in trading flows, he believes that the odds favor the notion that the Bitcoin price has indeed reached its bottom.

Featured image from DALL-E, chart from TradingView.com