A popular crypto trader is giving a gloomy forecast for Bitcoin (BTC) and Ethereum (ETH) as the two largest crypto assets by market cap plunge deeper into the red territory.
Pseudonymous crypto analyst Capo tells his 265,300 followers on Twitter that Bitcoin is in a downtrend and warns that buying BTC when the price seems to recover could result in massive losses.
“Yesterday’s pump fully retraced. Bull trap confirmed, and this time it has happened below $40,000.
Every bounce is a bull trap when the trend is bearish.”
He cites Bitcoin’s price surge before the Federal Reserve’s announcement to raise interest rates on Wednesday. Bitcoin has since dropped.
“Typical bull trap before the FOMC.”
At time of writing, the benchmark cryptocurrency is trading at $36,634.90, down by 7.88% in the last 24 hours.
Capo also says that Ethereum, which is currently changing hands at $2,750.73 after losing 6.23% of its value in the last 24 hours, could also drop to as low as $1,100.
“ETH
Main target: $1100-1300″
The analyst says that ETH is now in a distribution phase, which could indicate the price direction of the leading smart contract platform.
Accumulation or distribution?
1st chart: accumulation happens after a downtrend, and distribution after an uptrend (distribution more likely now)
2nd chart: funding has been very positive during the range, supporting the distribution thesis https://t.co/PyGbNvX2As pic.twitter.com/0SpqCJdzLQ
— il Capo Of Crypto (@CryptoCapo_) May 5, 2022
Capo warns traders to be particularly cautious of bull traps amid the bear market.
“Once again, don’t fall in the trap. You have been warned.”
“Bears are chilling in stables. However, bulls are afraid, and at some point they will capitulate.”
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