In the ever-volatile world of cryptocurrencies, trader and analyst DonAlt has sounded a cautionary note amid the recent Bitcoin and altcoin rallies. Known for his insightful analysis and strategy sessions, DonAlt expressed doubts about the sustainability of the current market enthusiasm. Here are the details…
DonAlt warns Bitcoin and altcoin traders
With 53,400 subscribers on YouTube, DonAlt’s views carry weight in the crypto community. In a recent strategy session, he expressed concerns about the dominant narrative in the market and its potential consequences. According to DonAlt, the recent rise in cryptocurrency prices can be attributed to investors’ expectations for the approval of multiple Ethereum-based futures exchange-traded funds (ETFs). While this news has certainly fueled optimism, he believes it may not be a strong enough catalyst to support ongoing rallies. DonAlt said:
If you look at the Bitcoin daily chart, you will see that we are back in the resistance cluster. Frankly I usually wouldn’t care too much about this as we tested it twice before this third test… But what I don’t like is that the market in my eyes basically goes into resistance on bull news… Because bull narratives unravel really fast… I don’t like the narrative assigned to this and I don’t like how the market in general is trading right now. I don’t like what you see.
ETFs attract attention
DonAlt also highlighted the historical performance of cryptocurrency futures products, highlighting the bearish impact on digital asset markets. He pointed out that Bitcoin futures ETFs generally coincide with periods when the market is at its peak. Additionally, analysts said:
I also think people in general have forgotten how Bitcoin futures ETFs are doing. If you show these on a graph, it doesn’t give a good picture. Most of the Bitcoin futures ETFs are at market peaks. [çıkardık]. There was one in 2017 – that basically ended the bull market. If I remember correctly, there was another one in 2021 that was pretty close to the top. Our overall record is not very good, so I’m very confused.
Link between ETF, futures and BTC’s record highs
Indeed, the launch of Bitcoin futures on the Chicago Mercantile Exchange (CME) in December 2017 was critical. Because it coincided with the beginning of a crypto bear market, with Bitcoin falling from its all-time high of $20,000 to $3,200 in 2018. More recently, in October 2021, ETF provider ProShares launched the first SEC-approved Bitcoin futures ETF. Within a month, Bitcoin reached an all-time high of around $69,000, but soon entered another bear market.
At the time of writing, Bitcoin (BTC) is trading at $27,065, highlighting the volatile nature of the cryptocurrency market. DonAlt’s cautionary words are a reminder that while the crypto market is filled with excitement, investors should be careful and not rely solely on ETF approvals as the driving force behind their investments. The crypto world remains as unpredictable as ever and only time will reveal the true trajectory of these recent rallies.
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