A closely followed crypto analyst says that an “ultimate capitulation” could be approaching for Bitcoin (BTC) and Ethereum (ETH) before any meaningful reversal takes place.
The pseudonymous analyst known as Capo tells his 239,000 Twitter followers that while Bitcoin has shown some resilience in the last week, a final downward movement below $30,000 remains his base case.
According to Capo, BTC briefly dipping below $30,000 is likely, but traders should be prepared for something much more extreme. He references the capitulation of March 2020 when most BTC bulls underestimated the bearish collapse.
“This would be the ultimate capitulation candle.
Main scenario remains $28,000 – $30,000, but if there are enough liquidations, we could expect the wick going much lower.
Be careful. I’m ready for everything.”
As bullish sentiment for Bitcoin creeps back into the market, the crypto trader is staying prepared for the worst, mapping out a potential drop below $20,000.
“You wake up and the weekly BTC chart looks like this.
What do you do?”
Capo also points out several factors that can make it difficult for bulls to turn Bitcoin around.
“Because we are in a bearish trend, with the SPX (S&P500) looking very bad, DXY (US dollar index) looking bullish, and bulls thinking that this is the bottom and we are going to $50,000 in two days.”
Looking at Ethereum, Capo says that ETH will be ready for a bounce only once it hits the $1,800 level, which is more than 31% away from current prices at time of writing.
“ETH
Strong rejection from resistance, next target should be $1,800. Expecting a bounce from there.”
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Art Furnace
