The crypto analyst who accurately called the 2018 bear market bottom is issuing a warning to Bitcoin traders, saying BTC is in danger of breaching support at $30,000.
Pseudonymous analyst Smart Contracter tells his 205,100 Twitter followers that Bitcoin’s recent surge from the lows of $33,000 on January 24th to the highs of $45,000 on February 10th appears to be a massive bull trap.
“BTC failed to hold the 0.618 [Fibonacci level] so looking like that downtrend break was an abysmal bull trap.
Feels like a test and possibly sweep of $28,000 support [is] inevitable at this point.”
At time of writing, Bitcoin is exchanging hands at $37,899.
In December, when Bitcoin was trading above $50,000, Smart Contracter predicted a sharp Bitcoin correction down to around $25,000.
“What if we take out the June lows again after taking out the April highs all as part of a larger structure that ruins both bulls and bears? I wouldn’t rule it out. Also on a side note, I maintained my bullish bias for too long and vastly underestimated the severity and depth of this dip.”
Smart Contracter appears to base his analysis on the market structure of the Dow Jones Industrial Average Index when it traded in a wide range between 1998 and 2009 before breaking out and igniting a parabolic surge.
While Smart Contracter is short-term bearish on Bitcoin, fellow market analyst Justin Bennett believes that BTC is already flashing bullish reversal signals on the lower timeframe.
“BTC hourly still looks good. Descending broadening wedge and RSI bullish divergence.
That doesn’t mean everything is A-OK, far from it.
The highest conviction play, in my opinion, is a daily close above $39,600. Dicey until then.
But the setup is there if bulls decide now is the time.”
Featured Image: Shutterstock/IM_VISUALS/Konstantin Faraktinov