Bitcoin Facing These 'Compelling Mid-Term Bearish Cases,' Warns Trader

While maintaining a bullish stance on Bitcoin’s BTC/USD long-term prospects, crypto trader Altcoin Sherpa has shared his thoughts on some compelling mid-term bearish cases.

What Happened: Sherpa points out several factors suggesting a potentially bearish scenario for Bitcoin in the mid-term.

• Presence of a rounded top formation in the price action, typically associated with a more "toppy" market.
• Current consolidation period length: previous run-ups did not exhibit similar price action for such an extended duration without a significant pullback.
• The overall market structure in 2020 was significantly different, and the current market is trending rather than ranging.
• Even if Bitcoin drops to the $40,000-$50,000 range, it could lead to a violent move that could "rekt the market" and cause altcoins to lose 50% or more of their current value.

He maintains that this would not signal the end of the current cycle and that Bitcoin could still reach six figures and experience a mania phase, possibly in Q4 2024, after a period of consolidation.

Also Read: If Bitcoin Starts ‘Losing The Lows’ It Could Get ‘Ugly’ And ‘Violent,’ Traders Warn

Why It Matters: Sherpa suggests that this type of price action could lead to larger downtrends or pullbacks, even if Bitcoin remains bullish on higher time frames. While he believes that predicting price action so far is not sensible, it is a good idea to think about it and plan for it.

The trader’s emphasis on the unique characteristics of each market cycle serves as a reminder that historical price action may not always be a reliable indicator of future performance.

Factors such as ETF inflows, improving macro conditions, and the upcoming U.S. elections could all contribute to a "different" market dynamic this time around. At a recent NFT event, Donald Trump stated that people can donate to his campaign using crypto.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19. To know how meme coins have evolved in the past few years, this could be a relevant read.

Read Next:  Bitcoin Retail Interest ‘Not Coming This Bull’, Warns Trader

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image created using artificial intelligence with Midjourney.