Bitcoin’s price has been soaring lately, exceeding $100,000 and boosting investor confidence. But a warning sign has appeared that could signal a major shift.
A Familiar Warning Sign
Back in 2022, the FTX collapse triggered a massive Bitcoin sell-off, causing a brutal price drop of over 60%. A specific indicator, the weekly SuperTrend, flashed a sell signal just before this crash. Now, that same sell signal has reappeared.
Crypto analyst Tony Spilotro highlighted this concerning development on X (formerly Twitter). The signal triggered just below the recent all-time high of $109,000.
Is the Strength an Illusion?
While Bitcoin’s price shows strength against the US dollar, Spilotro suggests this might be deceptive. The recent weakening of the US dollar could be artificially inflating Bitcoin’s price. Furthermore, the Bitcoin price in Euros (BTCEUR) hasn’t shown a similar positive trend, adding to the skepticism.
This bearish signal raises serious concerns, potentially indicating a market top and the beginning of another prolonged bear market. Based on the 2022 crash, a similar 60% drop could send Bitcoin below $50,000, severely impacting the altcoin market and potentially creating further problems for large Bitcoin holders.
Can Bulls Save the Day?
Spilotro outlined what needs to happen to avoid a downturn. A strong, large weekly candle needs to break out of the current price range and close above the upper Bollinger Band. As of now, this hasn’t happened, but there’s still time in May for bulls to push the price higher and confirm the uptrend. Failure to do so could trigger a reversal and send Bitcoin significantly lower. The pressure is on for a strong close to May.
