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According to Tone Vays, Bitcoin has rallied from its recent bear market low of $15,700 and is currently trading within a narrow horizontal band. The seasoned trader predicts that Bitcoin’s surge will likely take it to a significant resistance level, which could lead to the next sell-off event, even though he expects a bullish continuation in the short run.

He was explaining a chart when he indicated that because the horizontal channel is forming after a 10% upswing, there is a greater than 50% chance that the next breakout would be upward, at least by the channel’s small size and possibly by the last bounce’s larger 10%-plus magnitude. There’s a good likelihood of one more collapse to the sub-$15,000 level, according to Vays’ earlier prediction.

“That gets us to the underside of the prior channel, which is major and monster resistance, especially if it comes in contact with the 128-day moving average. So I am looking for this bounce to probably continue to year end, and then everyone is going to be super bullish in the beginning of the year, and then there is a high probability of one more capitulation down.”

Bitcoin Has Been in Capitulation Since June

According to on-chain data given by Glassnode, since June, Bitcoin and the market as a whole have been in capitulation, with the exception of a few rallies seen during this ongoing bear market. According to the chart below, BTC has firmly entered the capitulation sentiment as the Net Unrealized Profit/Loss (NUPL) on-chain data shows a decline into the red area, which was last witnessed in 2012, 2015, and 2019.

Only 54% of Bitcoin’s circulating supply was most recently moved on-chain for profit, according to the Bitcoin: Percent Supply in Profit (7-day Moving Average) indicator. This statistic shows the BTC circulating supply dropping below 50% via the FTX crash, a level that has only occurred during bear market lows.