A widely followed trader is issuing a warning, noting that Bitcoin (BTC) may be mirroring a pattern witnessed at the top of the 2021 bull market.
In a new YouTube video, crypto trader Cheds tells his 50,300 YouTube subscribers that Bitcoin’s rally to a fresh all-time high last week before succumbing to another sell-off could be an ominous signal to investors.
According to Cheds, Bitcoin is flashing an upthrust pattern, or a structure widely viewed as a bull trap, warning of market weakness and potential trend reversal.
“It’s when you break a resistance level and you come back [down] and fail to hold. That’s the upthrust. We also have the outside bar. This big red candle [on August 14th].”
The trader notes that the same pattern can be observed in 2021, when Bitcoin tried to break resistance at around $69,000 but failed, triggering the start of a brutal bear market.
“BTC 2021 fractal visual for fun.”
While Cheds is warning of a potential 2021 repeat for Bitcoin, the founders of the crypto analytics firm Glassnode believe that the recent BTC correction is just another opportunity for investors to load up on the digital asset king before the next leg up.
Jan Happel and Yann Alleman – who go by the handle Negentropic on X – say weak hands are being dusted off during the current crypto retracement.
“Market makers are moving large amounts of ETH and BTC onto exchanges — likely using this short-term market weakness to walk prices down.
This is often a shakeout before the next leg higher.
Use the pullback to build positions and catch entries you missed in the first leg of the pump.”
At time of writing, Bitcoin is trading for $115,744, down nearly 2% on the day.
Generated Image: Midjourney