Cryptocurrency markets have been experiencing great volatility lately. In this regard, crypto analyst Blockchainedbb warned investors and traders to be careful about buying Bitcoin (BTC). A series he made on Twitter in sharingEvaluating market conditions and asset prices, he emphasized that the risks to Bitcoin have increased in the current situation. The analyst stated that buying BTC at current price levels could be risky, especially pointing out the sharp declines that altcoins have experienced recently.
According to Blockchainedbb, while Bitcoin itself may not have experienced a significant decline, most altcoins have lost up to 60% from their recent peaks. This has put investors in a challenging position to rebalance their positions or cut their losses. However, the analyst stated that Bitcoin’s $55,000 level did not constitute a strong support and warned that the price could drop further from this point.
As part of the analysis, he pointed to the gray boxes on the chart and stated that these gaps represented “fair value gaps.” He pointed out that if these gaps are ignored, Bitcoin could potentially fall further.
When to Start Buying Bitcoin?
According to analyst Blockchainedbb, Bitcoin needs to rise above $68,000 for the market structure to change bullishly. However, investors’ willingness to buy with a target of $75,000 is notable in this process.
However, entering the market before this level can be risky. Because the market can move suddenly in either direction. The analyst warns that if the monthly fair value difference on the chart is not adhered to, Bitcoin could fall as low as $42,000 before reaching $75,000.
In such a scenario, holding altcoins can also become a significant risk. Some altcoins could potentially lose 40% to 60% more in value as Bitcoin declines. In this case, investors may face the risk of loss.
Even if Bitcoin eventually reaches $75,000, investors may struggle significantly to recoup their losses. Therefore, investors should carefully evaluate the risks and adopt appropriate risk management strategies before entering the market. Considering the uncertainty and volatility of the market, it is very important to be cautious.
Crypto Effect
The analyst also emphasized that if the ongoing geopolitical conflicts or the situation in the Middle East are not brought under control, the chances of further downside remain high. Additionally, since crypto markets operate on weekends when other markets are closed, any negative reaction in gold, oil, or the S&P 500 could push Bitcoin lower.
However, despite the current difficulties, the analyst does not foresee a full-blown bear market from this point on. Since this is an election year, the analyst expects the US government to take measures such as quantitative easing or interest rate cuts to stimulate the economy, potentially leading to a market recovery starting in June.
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