A closely followed crypto trader is issuing an alert to Bitcoin (BTC) holders, saying that the king crypto’s current market structure looks similar to its price action prior to a deep plunge about three years ago.
Pseudonymous analyst Kaleo tells his 566,300 Twitter followers that Bitcoin is currently consolidating above a diagonal trendline after taking it out earlier this year.
According to the trader, the price action is reminiscent of how Bitcoin moved in early 2020 when it rallied 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 appears ominous, Kaleo says that there’s still a chance for BTC bulls to come out ahead as long as the trendline holds.
“Both Bitcoin and SPX are retesting major high timeframe support levels.
In my opinion, there’s no reason to be a doomer / incredibly bearish here as long as these hold.”
Should the trendline fail to hold, Kaleo warns that BTC will likely witness a massive sell-off event.
“If they do happen to break, we’ll see real capitulation. Until then, I see this as a good risk/reward spot to long with clearly defined stops to the downside and huge upside potential.”
At time of writing, BTC is trading for $20,130.
Generated Image: Midjourney
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