Peter Brandt, a prominent trader, has issued a warning that Bitcoin could potentially face a dramatic 75% price drop, reminiscent of its decline in 2022.

He highlights a Double Top pattern in Bitcoin's price movement, echoing the trend from late 2021 when Bitcoin peaked at $69,000 before experiencing a significant downturn.

Brandt draws parallels to Bitcoin's performance in 2022, where it reached approximately $69,000 before losing over half its value during a bear market.

As Bitcoin approaches a critical juncture, traders are advised to manage risk carefully, as the cryptocurrency could either experience a significant decline or a resurgence.

Currently priced at $109,701.15, Bitcoin is under pressure to maintain levels above $108,000; failure to do so could trigger a panic sell-off.

Support and resistance levels are crucial for Bitcoin, with key thresholds identified between $108,000 and $108,500, while a breakthrough above $110,000 could either lead to new records or a pullback.

Current derivatives data reflects a bearish sentiment, with trading volume increasing nearly 30% to $100 billion and a higher number of short positions compared to long positions.

Recent liquidations totaling $163.26 million, primarily from short positions, indicate that Bitcoin's price surge has forced many traders to close their bets against it.

Technical indicators, including the MACD, suggest strong short-term momentum, but the proximity of the MACD lines indicates a potential easing of bullish momentum.

A bearish crossover has been observed, with the 9-period Exponential Moving Average (EMA) falling below the 21-period EMA, a signal that has historically preceded significant downtrends.

The derivatives market shows signs of overheating, with open interest rising to $76.25 billion, indicating that traders are preparing for future price movements.

Despite Brandt's warnings, Bitcoin has seen approximately $57 million in outflows recently, while Ethereum products have attracted $295 million in inflows, indicating a shift in investment within the cryptocurrency market.