Can stolen Bitcoin actually be traced or is that a myth?

Both partially true. Bitcoin is pseudonymous, not anonymous. Every transaction is permanently visible on a public ledger. With modern clustering software an investigator can usually:

• Group thousands of related addresses into a single 'wallet'.
• Identify when funds enter or leave a known service (exchange, mixer, payment processor).
• Reconstruct flows even after CoinJoin or peel-chain laundering, with varying confidence.

What investigators cannot do is unmask a wallet that has never touched a KYC service. If the thief only ever interacts with non-custodial wallets and privacy coins, on-chain attribution alone won't identify them. The vast majority of thieves eventually cash out somewhere — that's where recovery happens.