Bitcoin (BTC) just pulled off one of the more satisfying moves in trading: the classic fake-out breakdown followed by an aggressive reversal. And according to prominent crypto trader DonAlt, short sellers who took the bait are now facing a world of pain.
When "Dead" Coins Come Back to Life
Here's what happened. Bitcoin dropped below $92,000, and it looked genuinely terrible. The kind of chart that makes traders confident enough to short. That's exactly what they did. Then Bitcoin did what Bitcoin does best when everyone gets positioned the same way—it reversed hard, reclaiming the breakdown level and trapping all those shorts underwater.
"If you are shorting here, you are in deep trouble," DonAlt warned. This type of failed breakdown typically doesn't end with a polite consolidation. It ends with violent moves in the opposite direction. His target? A retest of $104,000 to $105,000 as trapped shorts scramble to cover their positions.
The setup makes sense from a technical perspective. When price breaks support, lures in sellers, then immediately reverses, you've created a pocket of traders who need to buy back their positions at higher prices. That's jet fuel for a squeeze.
The One Thing That Could Spoil the Party
DonAlt isn't blindly bullish though. While the weekly chart looks primed for a breakout, he pointed out that the monthly timeframe is sitting right at resistance. That's not nothing. Monthly levels tend to matter more than intraday wiggles.
Still, he views Bitcoin's ability to climb back to these highs as strength, not a warning sign. The key level to watch is $92,000. Hold above it, and the breakout thesis stays intact. Slip back below $90,000, and we're likely looking at a deeper correction.
Altcoins: Still a Tough Neighborhood
While Bitcoin flexes, the altcoin market remains what DonAlt describes as a "capital trap" for retail investors. Translation: most people are losing money while waiting for a rotation that may never come.
Take Litecoin (LTC). Some traders have been spinning narratives about how it should rally because silver is hitting highs. DonAlt isn't buying it. "It's at support, but it's been disappointing," he said, calling the chart underwhelming.
Monero (XMR) is the exception. DonAlt highlighted it as one of the few altcoins actually breaking out of a multi-year base, calling it "one of the more interesting ones" with room to run higher. When everything else is bleeding, a genuine breakout stands out.
Solana (SOL) is just chopping sideways. DonAlt doesn't hate it—he sees it as safer than most legacy altcoins—but right now it's less attractive than simply holding Bitcoin.
The Uncomfortable Truth About Holding Losers
DonAlt saved his harshest take for investors clinging to underwater positions in older altcoins, hoping for some miraculous rotation to bail them out.
The opportunity cost is crushing. "You miss out on the entire rally because you're just sticking with laggards," he explained. While Bitcoin potentially moves toward new highs, bagholder portfolios sit unchanged or worse.
His final warning was brutal but worth hearing: "99.9% of altcoins eventually go asymptotically to zero against Bitcoin. If you aren't ready to take losses, you will sit through losing all your money."
Sometimes the hardest trade is admitting you're in the wrong position and moving on. Especially when the alternative is watching your portfolio slowly bleed while better opportunities pass you by.