Trader warns that Current appreciation of cryptocurrencies is a trap2 min read
The last week has seen a strong recovery in the cryptocurrency market, with BTC, for example, up more than 11%. However, the trader known as Capo says that this appreciation is a trap for buyers.
In this regard, the trader – who predicted the recent drop in cryptocurrency prices – remains out of the market. Capo says that even with the appreciation, the selling force still remains in control of prices and, therefore, there is still a risk of further devaluations.
Trader remains out of the market
According to Capo, BTC is now in a decision range. With this, the market begins to decide whether the next moves will be accumulation or redistribution.
In the first case, investors start buying and accumulating BTC, preparing the market for a cycle of appreciation. On the other hand, in the redistribution there are several sales, especially among small investors.
But Capo says the current movement looks more like a redistribution because of a number of factors. First, accumulations usually have larger ranges, but the current range, according to Capo, is small.
In addition, the trader highlighted the large opening of positions, another characteristic of a bear market. There are also “many hidden bearish divergences” visible from an enlarged view of the market.
Therefore, indicators suggest that the recent increase is likely to be temporary. He calls the latest price jump a “fraud bomb”, convinced that the BTC will eventually fix again. However, the analyst did not give predictions about the intensity of the devaluation.
BTC and the market catch their breath
On Tuesday morning (19), the price of BTC operates at $22,019, down 0.16%. But for the week, the cryptocurrency is up 11.2%.
Ethereum (ETH), the second largest cryptocurrency on the market, is worth US$ 1,544 and registers a much more expressive appreciation: 44.75% in the last seven days. As a result of these valuations, the cryptocurrency market has rebounded to $1 trillion, worth $1.027 trillion in total.
However, BTC still remains nearly 68% below its all-time high of more than $69K, reached in November 2021.
On Monday (18), former BlackRock manager Edward Dowd said that BTC will be part of the portfolio of all managers in the future. Dowd highlighted the advantages of cryptocurrency over gold and that, in this sense, BTC is able to replace the golden metal as a store of value and protection for investors.