A closely watched crypto trader is issuing a warning to Bitcoin (BTC) holders, saying the crypto king’s current market structure resembles its price action prior to a deep dive about three years ago.
Pseudonymous analyst Kaleo tells his 566,300 Twitter followers that Bitcoin is currently consolidating above a diagonal trendline after clearing it earlier this year.
According to the trader, the price action is reminiscent of how Bitcoin moved in early 2020, when it rose from around $6,000 to $10,000 only to capitulate back to $3,000 in March of that year.
“Please sir be different this time.”
While Bitcoin’s current market structure seems ominous, Kaleo says there is still a chance for BTC bulls to emerge as long as the trend line holds.
“Both Bitcoin and SPX are retesting major high timeframe support levels.
In my view, there’s no need to be a doomer/incredibly bearish here as long as these hold.”
Should the trend line not hold, Kaleo warns that BTC is likely to witness a massive sell-off event.
“If they do happen to break, we will see true capitulation. Until then, I see this as a good risk/reward spot to long with clearly defined stops to the downside and great upside potential.”
At the time of writing, BTC is trading at $20,130.
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