A widely followed crypto trader is warning that Bitcoin (BTC) and other altcoins could soon make an abrupt trend reversal toward new lows.
Pseudonymous trader and crypto bear Capo tells his 781,400 followers on the social media platform X that Bitcoin could soon revisit the low $30,000s and bring a sudden market correction to alts after they rally one more time.
“As posted on TG (Telegram) a few days ago, BTC is probably forming a local top here at $40,000-$45,000. ETH could reach $2,500s, and some alts could have the last pumps. After this, a full reversal to new lows is likely over the next few weeks…
I believe new lows are still to come before the real bull market begins.”
The trader elaborates on his reasoning in a thread about why “we might still see new lows over the coming months.”
“Let’s start with BTC on HTF (high timeframe). We have seen a bullish trend during 2023. Many think that this is the start of a new bull market, but in my opinion, this is a corrective move. Now the price is at a major resistance zone. Confirmations are on the chart.”
He uses the Elliott Wave theory, which attempts to forecast price movements based on crowd psychology that is manifested in waves. The Elliott Wave theory suggests that price impulses happen in five waves after three-wave “ABC” corrections.
“BTC EW (Elliott Wave) perspective: the bearish trend during 2022 was an impulsive move that broke the 2020-2021 bull market trend. Now, the move from the $16,000 low looks like a corrective move (wave B/X). This move tends to be followed by another impulsive move (wave C/Y).”
Looking at Ethereum, the trader predicts that ETH could decline as low as $550 after facing resistance at around the $2,600 level.
“[ETH] has broken a key level and the next major resistance is $2,500-$2,600. It has a lot of liquidity below that should be taken eventually. The bearish confirmation would be a clean break below $2,000-$2,100.”
He suggests other altcoins are surging from an inflow of money from Bitcoin sales, which he says often indicates a market correction is coming soon.
“Money is flowing from BTC to altcoins. This usually happens during the last phases of a bullish trend. Some altcoins could pump more, but the trend is overextended and reaching to an end. When OTHERS (altcoins index) reaches the green zone, we should see a strong correction.”
Generated Image: DALLE3