A widely followed crypto analyst is shorting Bitcoin (BTC) after the crypto king printed gains of about 100% since November.
In a new video update, Nicholas Merten, the host of DataDash, tells his 511,000 YouTube subscribers that he believes Bitcoin’s recent surge is a relief rally trap, as “over-exuberance” spreads through the crypto markets.
He says that Bitcoin is likely running up against resistance at the range of $29,000 to $32,000 level and could decline in value soon.
“You want to wait until the setups come your way. And boy, do we have one now, finally, as we enter into the previous support pocket back during the last cycle. This has a very high chance of serving as resistance, especially after a 100% move in Bitcoin’s price. This is the kind of relief rally stuff that I’m looking to short.”
According to Merten, Bitcoin will likely not follow in the footsteps of its 2019’s price action as some are suggesting. About four years ago, Bitcoin witnessed a 300% rally in just a few months.
“It’s likely that we are not repeating the kind of same hyperbolic, fast recovery that we had in the last cycle, at least we’re not going to be going to that extent, a 300% move, roughly speaking. From bottom to top, this was a massive expansion in Bitcoin’s price, a much bigger move that carried out for a longer period of time.
So far, we’ve seen about a 100% move. So I really don’t like when people make this comparison. What I really think is a lot more fair when it comes to percentage terms and is more relevant to what we’re experiencing right now is the same relief rally trap that has constantly played out during this bear market.”
The crypto trader says Bitcoin is most likely following a similar pattern that started in June 2021, when it began a rally to a new all-time high and then collapsed.
“Notice here the pattern that we may be very well repeating, a 139% move from the mid-cycle correction lows that were back here in June of 2021. And within a matter of about 20 weeks, we saw Bitcoin rally 139% only to fall back down right at a time when everyone was convinced of the supercycle, of the dollar collapsing and Bitcoin being the super asset that’s going to go towards $100,000. What happened after? We entered into a brutal bear market, a multi-month downtrend.”
Bitcoin is trading for $30,470 at time of writing, down nearly 1.50% in the last 24 hours.
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