A widely followed crypto trader is issuing a warning to market participants that he expects massive drops ahead for digital assets.
In a lengthy message, pseudonymous trader and crypto bear Capo tells his 766,600 Twitter followers that he envisions Bitcoin (BTC) to drop toward the $12,000 level and for Ethereum (ETH) to dip to somewhere between $500-$700, though no specific timeframe is given.
The strategist, who has remained bearish on crypto assets despite this year’s rally, also says he expects an altcoin capitulation that sees them losing more than half of their value.
“The analysis hasn’t changed. Price is still at major resistance and as said before, the movement looks manipulated. A capitulation event is still likely and the main targets remain $12,000 for BTC and $500-$700 for ETH.
Altcoins would drop 60-80% on average.”
Capo says that many altcoins are showing signs of weakness or have already retraced from this year’s rally and are set to hit fresh lows.
The trader says he’s building short positions on a handful of crypto assets, including Binance Coin (BNB), Solana (SOL), and Polygon (MATIC), which have all recently been alleged to be securities by the U.S. Securities and Exchange Commission (SEC).
“Many altcoins have already made a new low below that of 2022 and some are even reaching Covid lows. Others have retraced much of this year’s bear market rally and are about to make new lows.
That’s why I have been building short positions for the mid-term (with low leverage) in which I’m adding size at key resistances and in the altcoins that I think may drop more (BNB, TRX, SOL, AAVE and MATIC). All these positions are in profit except the TRX one.”
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