Popular crypto analyst Nicholas Mertenthinks the crypto market is going through a long-term consolidation, but the current position of top traders is that the “final correction” will eventually create a reversal.
Speaking at a recent strategy session, Merten told his 496,000 YouTube subscribers that top traders are generally bullish and that the price of crypto assets will eventually rise once fear subsides.
Crypto fear and greed indexAccordingly, market sentiment has shifted from “fear” in December to “extreme fear” this month, which could pose problems for traders who use excessive leverage.
“While the bearish sentiment is still present in the market, it is very clear that we should see the last correction/fall by most of the leading indicators. We need people to be in a position where they are liquidated from their positions or flip coins, falling into their overly leveraged long positions.”
The trader added that strong investors will take advantage of the bear market to increase their holdings, while traders who take a short position may face the risk of liquidation of their assets.
“While everyone is piling on shorts, whales who like to buy real financial Bitcoin will make big purchases as shorts increase in the spot market.
With these purchases Bitcoin (BTC) they will push the price higher and cause more ‘pain liquidation’ for emotional traders, that’s how the whole system works.
Periods of higher prices are often feared by emotional traders and investors. Emotional traders in the market feed the kind of price action that institutions like to buy.”
At the time of writing, Bitcoin is down 5% on the day, losing the $40,000 support and is currently trading at $39,673.
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.