Bitcoin Surges 5.4% to $117,317, Analyst Warns of Bull Trap

An analyst who gained prominence for accurately predicting the 2022 crypto meltdown has issued a warning that Bitcoin’s recent surge may be a bull trap. The pseudonymous analyst, known as Capo, shared his concerns with his 970,500 followers on the social media platform X, suggesting that Bitcoin could experience a sudden correction after reaching a new all-time high of approximately $118,700 on Thursday.

A bull trap is a deceptive signal that indicates the end of a bearish trend, only for the price to reverse and experience a deeper decline. Capo cautioned his followers to remain cautious, as he believes the broader crypto market is also at risk of forming a bull trap. He noted that alternative cryptocurrencies, or alts, have not yet shown bullish higher high price patterns, and he anticipates another black swan event—a rare and unexpected occurrence that could trigger a significant market downturn.

Capo explained that May marked the local top for the market, with altcoins experiencing a 30% to 50% decline since then. He mentioned that while the Middle East conflict escalation has already caused a form of black swan event, he expects another one. Despite Bitcoin’s new all-time high due to institutional buying pressure, most altcoins remain in a clear downtrend, with some even reaching new all-time lows. Capo emphasized that the only crypto asset that has truly experienced a bull market is Bitcoin, with a few exceptions.

Capo also shared his analysis on the TOTAL2 chart, which tracks the market cap of all crypto assets excluding Bitcoin and stablecoins. He noted that the chart is not yet invalidating a bearish head-and-shoulders pattern on the three-day timeframe. A head-and-shoulders pattern typically suggests that an asset is losing momentum and could reverse its uptrend if the price breaks below the structure’s support. Capo expressed his skepticism about the recent price movements, stating that despite Bitcoin reaching a new all-time high, altcoins remain at clear resistance levels.

Capo further suggested that Bitcoin may be forming a blow-off top, a chart pattern in technical analysis showing a sudden rise in price followed by a sharp decline. He predicted that Bitcoin could correct to the $64,000 range based on his analysis. At the time of writing, Bitcoin was trading at $117,317, up 5.4% in the last 24 hours.