A widely followed crypto analyst and trader is expressing bearish sentiment on Bitcoin (BTC) as the crypto king continues to consolidate.
The pseudonymous analyst known as Pentoshi tells his 693,000 Twitter followers that Bitcoin could drop by as much as 38% from the current price if BTC loses its immediate support.
“BTC this area [has] been essentially what I’ve wanted to see price tap for the past two months.
*IF* we fall back into the range under this, *then* I think $19,000 – $20,000 and $22,000 – $23,000 are very very likely as we’ve seen with similar setups. So that’s a good way to work around this price for management. IF = THEN
Altcoins also back at November lows.”
At time of writing, Bitcoin is trading for $26,225.
According to Pentoshi, Bitcoin is facing a number of headwinds that could catalyze the next leg down for BTC.
The top trader mentions the possibility that the Department of Justice (DOJ) might be the next in line to sue crypto exchange Binance. He also says that the stock market may be due for a correction after rallying over the past few weeks.
“Here are a few things to consider. Crypto has suffered because of these for the most part.
Don’t generate revenues, don’t have companies making profits or providing services. No 401Ks/ETFs etc. Combined with lack of ability to invest from major allocators due to uncertainty = why weakness.
A few clouds overhead are DOJ (put this in a very very high probability of playing out near term). I think it’s essentially a certainty.
Possibility of S&P 500 index/Nasdaq topping out.”
Looking at the S&P 500, Pentoshi predicts that the index will likely correct in the next few weeks as it approaches a key resistance area.
“In my opinion, next few weeks we pullback towards 4,300
Feels like there is some local exhaustion showing up.”
Generated Image: Midjourney