Bitcoin Is Setting Up A Similar Structure To 2017 & 2021, What Happened Last Time?
Bitcoin’s move back above $80,000 has brought various interesting outlooks in terms of what’s next. Crypto analyst Merlijn The Trader says the current structure looks similar to Bitcoin’s fakeouts in 2017 and 2021, where price briefly broke below support, quickly recovered, and then expanded higher. This setup now raises the question of whether the latest breakdown was another bear trap before Bitcoin’s next major move.
Bitcoin Is Setting Up A Similar Price Structure
To understand why the current Bitcoin price setup is interesting, it helps to revisit what happened in 2017 and 2021. In both cycles, BTC bounced above a horizontal zone. However, the price reversed and fell below that floor, leading to a fakeout.
Traders who had positioned themselves with that level as their line in the sand were stopped out. However, that wasn’t the end. In both cases, the fakeout breakdown arrived in the middle of that journey, not at its end. BTC reversed course and then went on a rally that broke into new all-time highs.
According to crypto analyst Merlijn, Bitcoin might be setting up a similar structure in 2025. The recent break above $80,000 might as well be a fakeout before expansion. The next projected move is a sharp breakdown below support, and then an immediate recovery back into the range.
Watch Out For A BTC Trap
A fakeout would mean Bitcoin reverses its rally and then drops into the green support band, shakes out weak hands, and possibly convinces the market that a deeper bear move has started. This move will see BTC possibly falling below $60,000. The bullish part of the setup would only come if BTC then reclaims that support area quickly.
Bitcoin’s current position makes the setup more sensitive because the cryptocurrency is currently trading around the $80,000 level. This area has become a technical line that traders are using to judge whether the recovery can continue.
Although Bitcoin has recorded its first weekly close above $80,000 since January, the market is not fully out of danger yet. A move above $82,000 would back up the bullish case and open the door for further upside, while the bearish trajectory depends on BTC breaking below $78,000.
Nonetheless, the final outlook is bullish, especially if BTC continues to follow the 2017 and 2021 playbook. The analyst’s projection points upward from the current structure, exactly like the parabolic moves that followed the equivalent setups in the previous two cycles. The projection is that this setup will eventually lead to Bitcoin reaching a new price peak above $242,000, as the analyst sees it. At the time of writing, BTC is trading at $80,790.
Featured image from Getty Images, chart from Tradingview.com
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