Was Bitcoin's Sudden Crash A Bear Trap Or Shake Out?

BTC's price is closely approaching $62,000 after what some crypto analysts are calling one of the most dramatic bear traps.

A crypto analyst has highlighted the current stages of Bitcoin’s bull-bear cycle, suggesting that the cryptocurrency may be moving past a bear trap and preparing for significant bullish rallies toward new highs.

Was Bitcoin’s Sudden Crash A Bear Trap Or Shake Out?

BTC’s price is slowly approaching $62,000 after what some crypto analysts are calling one of the most severe bear traps. In an X (formerly Twitter) post on August 8, a crypto analyst known as ‘Sensei’ asked whether Bitcoin’s recent price crash was a “shake out or bear trap.”

A shake-out in this context is a common term used to describe a temporary price decline in a cryptocurrency that aims to shake out weaker investors and push them to sell their holdings. A bear trap, on the other hand, occurs when the price of a crypto asset falls dramatically, tricking investors into believing that the bear market has begun.

Sensei predicted that the Bitcoin bear trap will end this weekend, suggesting that bearish sentiments may be fading away. In the past weeks, BTC underwent a sharp price decline, dropping drastically below the $50,000 price level. The cryptocurrency crashed by over 20%, mainly driven by large-scale market liquidations.

Explaining further about Bitcoin’s bull-bear cycle phase, crypto analyst Michael van de Poppe disclosed that Bitcoin’s massive price correction could be the bear trap this cycle. According to Poppe, this price drop might cause a total capitulation, wiping out a whopping $1.2 billion in investments that were liquidated in leveraged trades.

Meanwhile, throughout the past months, Sensei has been notably bullish on Bitcoin’s future outlook. He anticipates a strong bull run this year, predicting that BTC’s bullish momentum could begin as early as next week.

The analyst also shared a chart highlighting Bitcoin fractal points, suggesting a potential for a huge bull run this cycle. Based on the chart analysis, BTC is still at the bottom (early phases) of its bull run, which requires stronger price fundamentals and more stability to build more momentum.

Analyst Predicts $72,000 Bullish Target For Bitcoin

In another X post on August 10, Sensei predicted that Bitcoin could rally as high as $72,000. The analyst shared a BTC price chart with two ascending trend lines, indicating that the current market trend and price action suggest that Bitcoin’s price is set to rise to new all-time highs.

At the time of writing, BTC is trading at $60,741, showing a 1.32% decrease over the past seven days, based on CoinMarketCap. Despite seeing a decrease in its 24-hour trading volume and value, the pioneer cryptocurrency managed to reclaim the $60,000 price level, showing a potential for a price recovery.