A closely-followed crypto strategist thinks Bitcoin (BTC) has made bulls believe the $20,000 area could be the bottom of a bear market. But contrary to this belief, this could be a bull trap, according to the analyst.
The analyst, known by the pseudonym Pentoshi, added 600,100 Twitter followers to the news that Bitcoin touched $20,000 support three times in about a month. warned.
“Things that seem safe but not safe… Can we go upstairs? Yes. Will these (leaps from support) turn into a nuclear bomb? Also yes. These are almost always set up as a trap for long positions that are thought to be ‘titanium support’ and build over time.”
In technical analysis, bouncing from a support level multiple times indicates a collapse is in sight as demand depletes in that price area.
Pentoshi also says that traders are buying Bitcoin near the top of its recent rally, pointing to more downside risks as the latecomers prepare to bounce back.
“It is interesting that most BTC changed hands at $24,000 despite people claiming they had bottomed out.”
The crypto strategist also highlights that Bitcoin is currently trading below the 200-week moving average, an indicator that marked the bottom of BTC during previous bear cycles.
$BTC 1W 200 MA enjoyooorrsss pic.twitter.com/Jjss0mHLHs
— Pentoshi 🐧 (@Pentosh1) August 21, 2022
As for Ethereum (ETH), the crypto analyst warns that the leading smart contract platform has failed to break through a crucial level of resistance, suggesting that the downtrend is very solid.
“The story writes itself. ETH.”
At the time of writing, ETH is trading below Pentoshi’s $2,000 marked resistance at $1,634.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.