A popular crypto strategist who has accurately sounded the alarm on crashing crypto prices this year is now updating his forecast for the top two digital assets.
The pseudonymous crypto trader known as Capo says that Bitcoin (BTC) has been experiencing a pattern of support/resistance flips, where the previous support low becomes the next ceiling of resistance.
He tells his 392,900 Twitter followers that investors repeatedly fool themselves into believing that a brief relief rally means that BTC has reached a cycle bottom.
“Small bounce without any bullish sign and people screaming bottom. Same story over and over.”
The trader next warns of a bull trap while providing a chart that highlights the divergence between a rising BTC price and sinking open margin contract interest. Bull traps lure investors into believing that an extended rally has begun, when in fact the price might soon flash negative again.
“Do not fall into the trap.”
Capo follows up on his bull trap hypothesis by saying Bitcoin is only going up because investors are liquidating their altcoin holdings and investing into BTC to eventually sell for cash.
“Bull trap. Altcoins moving to BTC to sell later. Bottom is not in yet.”
Yesterday, the analyst said that “$16,000 is like a strong magnet” for BTC’s price. Today, he provides an update cautioning investors to not chase the overnight price increase.
“Good morning! Still no reasons to buy yet. Waiting patiently.”
At time of writing, Bitcoin has recovered nicely from its weekly low of $17,760 and is now changing hands at $20,472.
When it comes to leading smart contract platform Ethereum (ETH), the pseudonymous trader notes that his $983 to $1,223 target area has been reached, before plotting out a new support level under $800.
“Main target reached, bounced from there, but no bottom formation yet.
Eyes on $700-800 as new support zone, which would complete the 5th of the 5th wave.”
Ethereum is also starting the week on an upswing, currently up 5.41% and trading for $1,116.
Despite both BTC and ETH experiencing rallies, Capo concludes his tweetstorm by sharing his latest predictions for how low each could go. The chart guru pegs Bitcoin as sinking to $16,200 and Ethereum to tap a low of $750.
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