A popular crypto analyst who’s been bearish on Bitcoin for most of 2022 is revealing one potential silver lining for BTC.
The pseudonymous trader Capo tells his 492,100 Twitter followers that trader activity following Bitcoin’s recent dip toward $20,000 means a short squeeze is possible, and now he’s optimistic about BTC until it recaptures the $23,000 resistance level.
A short squeeze happens when traders who borrow units of an asset at a certain price in hopes of selling lower to pocket the difference (short) are forced to buy back as the trade moves against their bias.
“There are a lot or shorts aping here at support, after taking the lows. Short squeeze is still likely. I’m short-term bullish until $23,000-$23,500.”
The analyst next follows up on an August 24th post to reaffirm his belief that after Bitcoin rises toward $23,500, the top crypto asset will likely fall back toward $16,000 by mid-September.
“Same idea despite the choppy range.
$23,000-$23,500, then down to new lows.”
At time of writing, Bitcoin is down along with most other markets in response to the Federal Reserve’s Friday announcement that it doesn’t intend to lower interest rates anytime soon.
BTC is off by nearly 6% on the day and trading for $20,341.
Capo is also tracking scalable blockchain platform Cardano closely all week, and now updates his followers to say that he sees ADA rallying along with Bitcoin in the short-term before heading to lower levels.
“Stop loss triggered at breakeven. Re-entered the trade from lower.
Risk/reward is too good, and it matches with the BTC analysis.”
Cardano is currently priced at $0.43, below Capo’s diagonal support but still within his risk parameters.
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Featured Image: Shutterstock/Anton Chernigovskii