Bitcoin (BTC) has seen a correction to below $26,000 after an unsuccessful attempt to break the $30,000 resistance point, which is widely considered to be a key trigger for a new bull run. This recent price action has left some analysts questioning the cryptocurrency’s future.
On September 3, a crypto analyst, Tolberti, on TradingView suggested that Bitcoin’s surge and subsequent decrease in value could be a “bull trap” of the year. He noted that the current chart appears to form a significant head and shoulders pattern, which is usually associated with bearish trends.
Tolberti said, “Bitcoin pumped significantly, but it’s definitely a bull trap, so do not fall for it! We can see that the chart is printing a huge head and shoulders pattern, which is a very bearish sign. This pattern is not confirmed yet as the neckline is holding, but the price is below the major blue trendline, which increases the probability of a breakdown!”
The analyst believes that this shift in the trend provides an opportunity for traders to take a short position on Bitcoin. He identified specific price levels that he believes could offer attractive entry points for traders. In addition, he advised against expecting a full-fledged bull market from Bitcoin yet, citing that the cryptocurrency is trading below the 200-weekly moving average, which is usually a sign of prolonged bearish sentiment. He also mentioned that Bitcoin could potentially drop to $10,000, with a reversal possibly taking place as early as March 2024.
On Tuesday, Bitcoin surged by nearly 8% to over $28,000 on the back of positive regulatory news. This was after a federal appeals court ordered the Securities and Exchange Commission (SEC) to reconsider its prior rejection of Grayscale Investments’ request to convert its GBTC into an Exchange-Traded Fund (ETF). However, the cryptocurrency quickly retraced most of these gains.
Some crypto enthusiasts believe that the approval of a Bitcoin spot ETF could be a major price catalyst for Bitcoin. This product, set to be the first of its kind in the US, is thought to be a key driver of institutional capital inflow into the broader crypto market. Nevertheless, some analysts caution that the hype surrounding an ETF approval should be tempered, as it is not a guaranteed path to a rally in Bitcoin’s price.
At the time of writing, Bitcoin was trading at $25,903, representing a 0.45% gain in 24 hours and a 0.61% decrease in a week. Based on the one-day indicators on TradingView, the sell recommendation is 14, the strong sell is 13, and the neutral stance is 8.
As Bitcoin continues to show limited growth, market watchers are monitoring various potential catalysts, such as the upcoming 2024 halving event, macroeconomic factors, and regulatory developments.
It is important to remember that the content on this site should not be considered investment advice. Investing is speculative and your capital is at risk when investing.