Top Trader Warns Bitcoin and Altcoin Rallies Could Reverse
A trader who successfully predicted the crypto breakout earlier this year is now cautioning that the recent rallies in Bitcoin (BTC) and altcoins may not be sustainable. In a strategy session, analyst DonAlt suggests that the market is rallying due to expectations of multiple Ethereum (ETH)-based futures exchange-traded funds (ETFs) being approved.
However, DonAlt believes that this catalyst is not strong enough to support the current market rallies. He expresses concern about the market pushing into resistance levels based on what he considers to be unreliable news and narratives, as these tend to unravel quickly.
DonAlt also points out that historical data shows crypto futures products have had a bearish impact on digital asset markets. He mentions previous instances where Bitcoin futures ETFs coincided with market tops, leading to subsequent bear markets.
For example, when the Chicago Mercantile Exchange (CME) introduced Bitcoin futures trading in December 2017, BTC hit a cycle high of $20,000 on the same day. This marked the start of a bear market that saw Bitcoin’s price drop to $3,200 in 2018. Similarly, when ETF provider ProShares launched the first SEC-approved Bitcoin futures ETF in October 2021, BTC reached an all-time high before entering a bear market.
As of now, Bitcoin is trading at around $27,065.
Hot Take: Bitcoin and Altcoin Rallies Could Unwind Quickly
According to top trader DonAlt, the recent rallies in Bitcoin and altcoins may not be sustainable. He believes that the market’s current upward momentum is driven by expectations of Ethereum-based futures ETFs being approved. However, DonAlt warns that this catalyst is not strong enough to support the ongoing rallies. He expresses concern about the market pushing into resistance levels based on unreliable news and narratives, as they tend to unravel rapidly. Additionally, DonAlt points out that historical data shows a bearish impact of crypto futures products on digital asset markets. Previous instances of Bitcoin futures ETFs coincided with market tops, leading to subsequent bear markets. Therefore, he urges caution as the current rallies could reverse quickly.
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