Analyst Warns Crypto Traders Making Big Mistakes With Bitcoin (BTC) Right Now – Here’s Why
A popular analyst is warning that crypto traders are jumping the gun by piling into Bitcoin (BTC) now.
In a new strategy session, crypto strategist Nicholas Merten tells his 511,000 YouTube subscribers that Bitcoin is likely to drop lower in price, resulting in a bull trap for traders who just went long after BTC’s recent bullish price action.
He warns that Bitcoin has yet to trade and hold support above its 200-week moving average, signaling a liquidity trap is forming at current prices.
“Instead of just waiting for price to stay above the 200 weeks and find support there, people are already going ahead and chasing it. Where have we seen this before? That’s exactly what’s happening, the same exact supply zone or resistance area that we found ourselves in back in August, just maybe a little bit higher to entice people, to get people excited, breaking above the August price action, breaking a little above the 200-week a couple of times, and not being able to actually formulate support.
But again, investors are not waiting for that. They are not waiting for the 200-week support. They go ahead and buy in right now. And that’s the big mistake that everybody makes because it’s a liquidity trap, classic 101 example of how market investors or more specifically institutional investors can trick retail traders and take advantage of pressures on the production side to serve as exit liquidity for positions.”
Merten acknowledges that his previous estimates of Bitcoin falling as low as $10,000 or $12,000 may never happen. But he predicts Bitcoin could fall to $16,000, a 32.5% drop from today’s price. Bitcoin is worth $23,717 at the time of writing.
“I understand that there is a lot of optimism to get through the 200 days. The price action is definitely looking exciting and it is nice to see the price come up to this area. Maybe we won’t get our lower price tags for Bitcoin. We can’t go below five figures, we can’t go down to $10,000 to $12,000. I’m perfectly fine to accept that, and maybe we should have focused on the prices going a little lower than expected.
But at the same time, that doesn’t mean that this can’t be a long-term accumulation channel, essentially, that we’re going to get retested in this area around $16,000, much like we saw in the bear market of 2014 and 2015. Notice how we went through a year of sideways chopping, and even set new lows.”
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