Analyst Nicholas Merten Goes Short on Bitcoin (BTC) as ‘Over Exuberance’ Spreads in Crypto Markets
A widely followed crypto analyst is shorting Bitcoin (BTC) after the crypto king posted gains of around 100% since November.
In a new video update, DataDash host Nicholas Merten tells his 511,000 YouTube subscribers that he believes Bitcoin’s recent surge is a relief rally trap, as “over-exuberance” spreads through the crypto markets.
He says Bitcoin is likely running up against resistance in the $29,000 to $32,000 range and could soon drop in value.
“You want to wait for setups to come your way. And boy, do we have one now, finally, as we enter the previous support pocket back during the last cycle. This has a very high chance of serving as resistance, especially after a 100 % movement in Bitcoin’s price. This is the type of relief rally stuff that I’m looking to short.”
According to Merten, Bitcoin is not likely to follow in the footsteps of 2019’s price action, as some suggest. About four years ago, Bitcoin witnessed a 300% rally in just a few months.
“We’re not likely to repeat the same hyperbolic, rapid recovery that we had in the last cycle, at least we’re not going to go to that extent, a 300% move, roughly speaking. From bottom to top, this was a massive expansion in Bitcoin’s price, a much larger move that was carried out over a longer period of time.
So far we have seen 100% movement. So I really don’t like it when people make this comparison. What I really think is much fairer in percentage terms and more relevant to what we’re experiencing right now is the same relief rally trap that’s been playing out throughout this bear market.”
The crypto trader says Bitcoin is most likely following a similar pattern that started in June 2021, when it began a rally to a new all-time high and then collapsed.
“Notice here the pattern that we may well repeat, a 139% move from the mid-cycle correction lows that were back here in June 2021. And in about 20 weeks we saw Bitcoin rally 139% only to fall back at exactly the time when everyone was convinced of the super cycle, that the dollar was collapsing and that Bitcoin is the super asset that is going to go towards $100,000. What happened next? We entered a brutal multi-month bear market downward trend.”
Bitcoin is trading at $30,470 at the time of writing, down almost 1.50% in the last 24 hours.
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