A financial analyst, who accurately predicted the lowest point of Bitcoin’s bear market in 2018, is now forecasting a further drop for the popular cryptocurrency.
Going by the Twitter handle Bluntz, this analyst has shared with his 223,600 followers that BTC seems to have formed a bearish lower high pattern on its four-hour chart.
Based on this pattern, Bluntz believes that BTC has lost its momentum and is likely to experience an ABC correction, which could cause its value to fall below $28,000.
“Savage four-hour forming here on BTC. I am updating my view a little bit and now expecting a deeper decline, a little bit further than just a simple $29,000 sweep, thinking more like (a move to the) $27,000 zone now.”
An analyst predicts that if Bitcoin follows the trader’s pattern, it will experience a sudden reversal once it reaches its downside target.
The analyst’s chart indicates that this reversal will likely result in a rally that will push BTC above its resistance point at $31,500 and eventually reach around $33,800. Another crypto analyst, Inmortal, also believes that BTC may briefly drop below the psychological support at $30,000 before regaining its bullish momentum.
The trader predicts that this drop will be a bear trap, and BTC will immediately reverse and rally towards $32,000.
“> Early week dump to break support
> People go short
> They get trapped
> Then we try to long the reclaim before the squeeze
That’s a setup I would long.”
Monitoring the supply of Tether (USDT) and US Dollar Coin (USDC) on exchanges can give traders a hint when there is a potential price surge in the crypto market.
“Especially when USDT and USDC supplies are being moved rapidly to exchanges, as we saw with USDC in March right before the market-wide price surges.”
According to the analytics firm, traders should keep an eye on the stablecoin activity of the top 10 largest USDT and USDC addresses.
