Markets
Bitcoin Likely in Bear Trap Phase Before Explosive Move Up, According to Crypto Analyst
Well-known cryptocurrency analyst TechDev says that Bitcoin (BTC) is likely in the midst of a bear trap to shake out weak hands before a big upward move in price.
The pseudonymous analyst shares with his 464,000 followers on social media platform X a Bitcoin chart that suggests BTC is mirroring its pre-parabola price action from 2017 after roughly 1,200 days of accumulation.
TechDev’s chart also incorporates the net unrealized profit and loss (NUPL) metric, which measures the overall sentiment of market participants by tracking the unrealized gains and losses of all coins in circulation.
Based on his chart, the analyst sees Bitcoin’s NUPL going through four different stages in a bull cycle: hope, optimism, belief, and euphoria. The analyst suggests that Bitcoin is in the belief stage, where the biggest rallies of the bull run happen.
“Bitcoin.”
Source: Technological Development/X
TechDev shares another chart showing what he believes are the 16 different stages of Bitcoin’s market cycle.
He believes BTC is currently in the “bear trap” phase, where a “correction fueled by overvaluation concerns and premature fears that the cycle is over” sends prices tumbling, just before a massive expansion into the euphoria zone.
Source: Technological Development/X
TechDev also looks at two indicators that he says have a good track record of predicting the start and end of previous Bitcoin bull runs: the relative strength index (RSI) and the Chaiken Money Flow (CMF) index. The RSI is a momentum indicator, while the CMF is a volume-weighted average of accumulation and distribution over a given period.
Says TechDev,
“RSI calls tops. CMF calls blow-offs.”
Source: Technological Development/X
Looking at the trader’s chart, it seems to suggest that the RSI has yet to reach a descending resistance line that has signaled the end of bull markets in previous cycles. Meanwhile, the CMF has just broken above a resistance level that has previously signaled the start of major Bitcoin rallies.
At the time of writing, Bitcoin was trading at $55,282.
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