The crypto strategist who nailed this year’s crypto meltdown is issuing a pressing warning to Bitcoin (BTC) bulls.
Pseudonymous crypto trader Capo tells his 579,600 Twitter followers that Bitcoin traders should start exercising caution as he says BTC is now in the process of trapping as many bulls as possible.
Capo says that after Bitcoin’s latest surge above $21,000, the king crypto has now reached a price area where smart money investors will likely take profits and push BTC to new 2022 lows.
“As I’ve said many times, $21,000-$21,500 is hammer zone (distribution zone). Distribution phases are made to trap as many longs as possible while destroying early shorts. This means several pushes into the resistance zone, that strong hands use to keep building their position.”
Based on the chart, the analyst appears to predict that the distribution above $21,000 would trigger a sell-off event that pushes Bitcoin all the way down to his target at $14,000, suggesting an over 34% downside for the top crypto by market cap.
Although Capo has a bearish view on Bitcoin, the chart also shows that his thesis would be invalidated if BTC manages to rally and consolidate around $23,000.
For now, Capo says he is waiting for confirmation signals before shorting Bitcoin.
“I’m not bullish on BTC anymore, but I’m not shorting neither until I see bearish signs (until the distribution is complete). A last push to $21,400-$21,500 is possible and you don’t want to short here without a bearish confirmation.”
At time of writing, Bitcoin is changing hands for $21,377, up over 5% in the last 24 hours.
Capo next takes up altcoins, saying he remains bullish on crypto assets other than Bitcoin for the moment.
“I’m still bullish on altcoins but being cautious (trailing the SL [stop loss] in profits). I will turn full bearish soon.”
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Featured Image: Shutterstock/Tithi Luadthong