"Entering a Downtrend Pattern with Lower Highs" Bitcoin Expected to Plunge to $56,000 After Short-Term Rebound

▲ Bitcoin (BTC) Crash/ChatGPT Generated Image ©

As the virtual asset market buzzes with anticipation of breaking above $80,000, chilling warnings from experts suggest that premature buying could become a casualty of a massive downturn, necessitating extreme caution from investors.

According to the crypto-specialized media Bitcoinist on April 29 (local time), virtual asset analyst Sherlock Whale pointed out that while Bitcoin (BTC) could rise towards the $80,000 mark in the short term, it is more likely to be a trap that plunges late buyers into deep losses rather than leading to a sustained bull run. He analyzed that the current market situation is easily mistaken for the start of a bull market, but in reality, a typical pattern of lower highs, indicating a decline, could unfold.

The analyst explained that many traders currently expect new highs, but the chart structure shows a very similar trend to past resistance zones around $107,000 and $97,000, where strong selling pressure caused a loss of upward momentum. In the past, buyers who confidently entered this zone late, expecting a rise, were crushed by profit-taking selling from bears and were trapped.

Sherlock Whale warned that such a 'trap' could occur again when Bitcoin approaches the key resistance level of $79,300, and presented two specific downside scenarios. The first is a projection that if the weekly candle closes below $79,300, it would be considered a strong short-selling signal, leading to a sharp drop to $60,000.

The second scenario is if Bitcoin temporarily breaks above $79,300 and continues its rally towards approximately $83,400, which aligns with the 0.618 Fibonacci retracement level. He views even this zone as a liquidity trap designed to entice buyers, ultimately predicting that a large-scale decline will begin, eventually falling to $60,000, which is estimated to be the bottom of the bear market.

Renowned market analyst Michaël van de Poppe also presented a similarly pessimistic outlook. He warned that after Bitcoin stages a short-term rally to the next resistance level between $85,000 and $88,000 in May, its upward momentum could exhaust, leading to a severe crash, plummeting to the $56,000 mark, urging a cautious approach.

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