The strategist who predicted this year’s Bitcoin (BTC) collapse below $30,000 says the crypto market’s latest bounce will likely be short-lived.
Pseudonymous crypto strategist Capo tells his 434,400 Twitter followers that the rally Bitcoin experienced by surging above $22,000 is unconvincing at a time when the US dollar index (DXY) is in the midst of a parabolic rally.
Traders are often bearish on risk-on assets like crypto whenever the DXY is flashing signs of strength as it indicates investors are flying to the safety of the US dollar.
According to Capo, Bitcoin will likely meet strong resistance while altcoins appear primed for a 50% devaluation.
“DXY going parabolic. Bitcoin going up a bit and people getting euphoric and calling for $40,000. Not a single bullish sign to support this move up and price is still at $21,000 – $22,000 (resistance).
Rejection will be strong. Altcoins could drop 45-50%. There will be no mercy.”
Bitcoin is trading for $21,639 at time of writing, a jump of about 15% from this month’s low of $18,781.
Among the altcoins that Capo expects to witness steep haircuts include Binance Coin (BNB) and XRP. Earlier this week, Capo set a bottom target for BNB between $125 and $135 while he said XRP could drop to as low as $0.14.
At time of writing, Binance Coin is swapping hands at $242. Meanwhile, XRP is valued at $0.34.
Capo also says he’s keeping a close watch on the order books of some crypto exchanges to track the depth of buy orders for BTC and Ethereum (ETH). According to the crypto strategist, deep-pocketed investors are placing spoof buy orders to force the price of BTC and ETH higher in an effort to trap bulls for the next leg down.
“Kraken and some other exchanges like FTX have been spoofing every bounce up, just to fill sell orders above. Both on BTC and ETH. That’s not an organic move up, but a fake one. A bull trap.
When they pull the spoofing orders, market goes to new lows. They just pulled them.”
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Featured Image: Shutterstock/sakkmesterke/Andy Chipus