Bitcoin’s Recent Surge Might Be a Bull Trap, Warns Analyst
An analyst who gained popularity for accurately predicting the 2022 crypto meltdown is now cautioning investors about a potential bull trap in Bitcoin’s recent explosive move. Capo, a pseudonymous analyst with a significant following on the social media platform X, believes that Bitcoin’s new all-time high of around $118,700 could be a setup for a sudden correction.
A bull trap, as Capo explains, is a false signal that lures investors into thinking that a bearish trend is over, only to see the price reverse course and experience a deeper downturn. With Bitcoin hitting new highs, Capo warns his followers to remain cautious as the broader crypto market may also be at risk of forming a bull trap, especially as altcoins have yet to show bullish higher high price patterns. He also anticipates another black swan event, a rare and unexpected occurrence that triggers a significant market crash.
According to Capo, May marked the local top for the market, with altcoins already down by 30%-50% from those levels. While Bitcoin continues to see buying pressure from institutional strategic reserves, most altcoins remain in a clear downtrend, with some even reaching all-time lows. The analyst emphasizes that only Bitcoin, along with a few exceptions, has truly experienced a bull market, while altcoins struggle to break out of their bearish trends.
Capo also points out that the TOTAL2 chart, which tracks the market cap of all cryptocurrencies excluding Bitcoin and stablecoins, is showing signs of a bearish head-and-shoulders pattern on the three-day timeframe. This pattern typically indicates a loss of momentum and a potential trend reversal if the price breaks below the support level.
Despite Bitcoin’s new all-time high, altcoins are still facing resistance, leading Capo to express skepticism about the current market move. The analyst suggests that Bitcoin might be forming a blow-off top, a chart pattern that often precedes a sharp price decline. Looking at his charts, Capo predicts a potential correction for Bitcoin to the $64,000 range.
As of the time of writing, Bitcoin is trading at $117,317, up 5.4% in the last 24 hours. Investors are advised to stay vigilant and monitor the market closely as the cryptocurrency landscape continues to evolve.
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