A closely watched cryptocurrency trader is issuing an alert to Bitcoin (BTC) holders, saying the crypto king’s current market structure resembles its price action before a deep plunge around three years ago.
Pseudonymous analyst Kaleo tells his 566,300 Twitter followers that Bitcoin is currently consolidating above a diagonal trend line after taking it off 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 the same year.
“Please, Lord, be different this time.”
Although Bitcoin’s current market structure looks ominous, Kaleo says there is still a chance for BTC bulls to gain as long as the trend line holds.
“Both Bitcoin and SPX are retesting important high time frame support levels.
In my opinion, there is no reason to be a doomer/incredibly bearish here as long as these hold up.”
If the trend line does not hold, Kaleo warns that BTC will likely witness a sell-off event.
“If they break, we will see a true capitulation. Until then, I see this as a good risk/reward venue for long positions with clearly defined downside stops and great upside potential.”
At the time of writing, BTC is trading at $20,130.
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