Veteran commodity trader Peter Brandt has issued a cautious assessment of Bitcoin's recent price action. The market analyst shared a technical chart depicting what he characterizes as a ”dead cat bounce” following the cryptocurrency's sharp decline from above $120,000 to the low $80,000s. Bitcoin now trades within a narrow range between $88,000 and $92,000. This corridor has become the focal point for traders attempting to gauge the asset's next direction. Brandt's chart outlines a five-wave corrective pattern, suggesting that the recent recovery may lack fundamental strength. Source: X The cryptocurrency dropped more than $40,000 in two weeks before stabilizing, to trade at around $86,869, up 0.9% in the last 24 hours. Market participants remain divided on whether this represents a temporary pause before further declines or the foundation for renewed upward momentum. BTC price chart, Source: CoinMarketCap Technical Structure Points to Defensive Positioning The chart analysis reveals a market operating in reactive mode rather than showing signs of aggressive accumulation. Trading volumes remain subdued compared to the rally that pushed Bitcoin above $120,000 earlier this year. Order book depth has diminished across major exchanges, creating conditions where large trades can move prices more dramatically. Liquidity conditions deteriorated throughout the previous week. Bid-ask spreads widened on several platforms, indicating reduced market maker participation. These technical factors suggest traders are approaching current levels with caution rather than conviction. The $88,000 to $92,000 range has absorbed multiple tests from both directions. Support at $88,000 has held against downside pressure, while resistance near $92,000 has rejected upward attempts. Neither bulls nor bears have managed to establish clear control. Recent liquidation data shows over $1.2 billion in long positions were forced out during the decline. This deleveraging has cleaned up some excessive positioning but has not been followed by the type of aggressive buying typically seen at major bottoms. The absence of strong dip-buying activity raises questions about demand strength at these levels. Bitcoin ETF Flows Show Shift in Institutional Sentiment Bitcoin exchange-traded fund activity has shifted markedly from patterns observed earlier in the quarter. BlackRock's IBIT, the largest spot Bitcoin ETF, recorded multiple net outflow sessions last week. The product had previously attracted consistent inflows during Bitcoin's climb toward $120,000. Smaller ETF products displayed mixed results, with some registering modest inflows while others experienced withdrawals. The inconsistent flow pattern contrasts sharply with the steady accumulation seen during the fourth quarter of 2024 and early January 2025. These ETF movements matter because they represent institutional and retail demand through regulated investment vehicles. The shift from consistent inflows to scattered activity suggests changing risk appetite among traditional investors. Portfolio managers may be reassessing crypto allocations following the sharp correction.
