A popular crypto strategist and trader is predicting that Bitcoin will ignite a rally above the $50,000 but warns that BTC may not be able to sustain its ascent.
Pseudonymous crypto analyst Pentoshi tells his 462,300 Twitter followers that he expects Bitcoin to print a bearish lower high setup above $50,000 before resuming its downtrend.
“We travel to [Michael] Saylor’s BTC average in 2022, in my opinion. But a lower high on the macro first. At least the way it looks for now. Invalidation is the same invalidation we’ve had since all-time high breakdown: above $58,000 – $60,700. Selling a lower high is such a good risk reward on both sides in my opinion. Minimal opportunity cost, max reward.”
According to Pentoshi’s chart, Bitcoin is currently in a bearish trend and looks poised to revisit its macro range low below $30,000 by May 2022.
In the short term, however, the crypto strategist says that support at $40,700 should hold as the crucial price area acted as a strong resistance level for most of 2021.
“$40,700. Historical context is so important yet rarely utilized. Where does big money enter and exit?”
In technical analysis, once an asset takes out a strong resistance area, the price level often gets converted into support as bulls are expected to defend their hard-won territory.
While Bitcoin puts up a relief rally, Pentoshi believes that altcoins will either trade sideways or go lower, suggesting that BTC will pull in most of the liquidity in the crypto markets.
“Now that alt/USD and alt/BTC [market] structure are both breaking, max pain, in my opinion, would be when BTC bounces, alt/USD gets stuck on pivots + alt/BTC bleeds while Bitcoin goes to a lower high then dumps, where alts make lower lows on both pairs following that. Every time BTC.D [BTC Dominance] hits ‘sell,’ market finds pain.”
Featured Image: Shutterstock/Jorm S/Velishchuk Yevhen