Veteran crypto trader Tone Vays says that leveraged traders are getting crushed as Bitcoin launched a massive bear trap.
In a new strategy session, Vays takes a look at Bitcoin’s strong bounce from the $47,100 level and says the move was abrupt and largely unexpected.
“This is one of those classic head fakes, and this is a really nasty heady fake because it actually made a whole new swing low. I don’t like to use the word manipulation because I don’t think this is manipulation. I think this is just whales screwing with you. And the reason why I don’t call this manipulation is that just because someone has more money than you and is able to move the market, as long as they’re playing by the rules there’s nothing wrong with that.
So to me, I like to reserve the word manipulation for some kind of insider advantage or some kind of illegal activity. But if this was simply a guy or a few entities with money moving the market, then they have the money and power to move the market… It definitely is the Michael Jordan of head fakes, or the Allen Iverson of crossovers, either way, but this is a really nasty one.”
Vays highlights that Bitcoin’s unexpected bounce is a classic example of how difficult trading with leverage can be.
“The only way to hold through this insanity is by having like, less than 5x leverage, and even then, this is scary as hell if you’re long, and what’s happening right now destroyed you if you were short. The only people that were probably happy right now are the ones that are trading with under 3x leverage. So this goes to show you how challenging leverage is.”
The former Wall Street trader says the $57,000 level is the crucial price point for BTC to get over in order to maintain bullish momentum. Once BTC breaks that range, Vays says all-time highs are imminent.
“On a daily scale, I have a critical level of $57,000… And if we can get above $57,000, I think we’re going to get to $70,000 or $80,000 fairly quickly.”
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Featured Image: Shutterstock/Federico Rostagno