Popular analyst Justin Bennett says latest crypto bump is a bull trap – here’s why
A closely watched crypto analyst is warning investors to avoid getting too excited after markets returned a flash crash over the weekend.
In a series of posts, Justin Bennett says his 107,100 Twitter followers that he expects crypto prices to continue to fall, noting that the recent rally could be a bull trap, luring investors into falsely believing that an extended rally has begun.
“Don’t be fooled. As it stands, this week’s rally is nothing more than a bearish retest/bull trap.
Context is king!”
Bennett provides two charts indicating that Bitcoin (BTC) has fallen below ascending channels – the first tracking since 2014, the second since last April.
The analyst next discussing how altcoins are not likely to be a safe haven due to the larger negative macroeconomic outlook.
“To anyone saying altcoins won’t pull back that far… They already did once.
Alts retreated over 90% during the last bear market. So to think they will stop at -74% this time with rampant inflation, a global recession etc is naive, [in my opinion].”
Bennett offer a pair of charts tracking the total crypto market capitalization minus Bitcoin. The first looks at daily candles since May, and the second shows weekly candles dating back to 2016.
“Don’t forget to zoom out.
Left: How altcoins look on the daily chart.
Right: How they look in the weekly magazine.
Crypto has lower to go, [in my opinion].”
The crypto guru ends his analysis with reminder readers about how the S&P 500 fell last Friday after Federal Reserve Chairman Jerome Powell announced more rate hikes. Bennett believes that risk assets do not look promising in the short term.
“A slight pullback from crypto today, but don’t lose sight of what the S&P 500 did on Friday.
The upside for risk assets is limited, [in my opinion].”
Bitcoin is back in negative territory after recapturing the $20,500 level on Monday.
At the time of writing, BTC is down almost 3% and is trading at $19,803.
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Featured image: Shutterstock/Sergey Nivens/Nikelser Kate
