A closely followed crypto strategist says that Bitcoin (BTC) bulls could be in trouble as the latest crypto market dip could be setting up a trap for them.
The pseudonymous trader known as Capo tells his 244,000 Twitter subscribers that the top crypto asset by market cap’s next support level looks weak and that a test of it could land BTC near the $20,000 mark.
“So after $40,000, [the] next support and pivot level is $30,000, but that support has been tested many times and it’s weak, so if we see a dump to that level, I don’t think it will hold. Below $30,000 it goes to $21,000-$23,000.”
Capo warns investors that BTC’s recent price volatility could be a bull trap.
“Price up [and] open interest down during a downtrend = bull trap. Be careful.”
The analyst then says he foresees the sell-off to $30,000 coming soon despite bulls trying their best to maintain BTC’s price.
“Bears are pushing hard…
Bulls [are] trying their best but supply is very strong. Hard to see it going $39,000. Dump incoming soon in my opinion.”
Bitcoin is exchanging hands at $37,495 at time of writing, a 16% decrease from its seven-day high of $44,574.
The strategist is also keeping an eye on smart contract platform Cardano (ADA) and canary network Kusama (KSM). He says the altcoins are also due for a correction.
“[ADA] just broke the key level ($0.95-$1.00) after many tests.
Next support is $0.45-$.50. I expect a bounce from there, which could last weeks, and then the resistance would be the key level that was just broken. Bullish above, bearish below.”
Capo also notes that KSM appears to be in dire straits.
“[Kusama is] another altcoin that looks incredibly bad. Truth is that this cycle is over. Maybe when you want to open your eyes, it will be too late.”
KSM is trading for $128 at time of writing, a 7% drop on the day while ADA is moving for $0.87, an 8.5% dip during the same time frame.
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Source: https://dailyhodl.com/2022/02/22/popular-crypto-analyst-issues-warning-to-bitcoin-bulls-says-latest-btc-dip-could-be-a-trap/