A Warning for Bitcoin Traders
An analyst and trader known as The Flow Horse is cautioning Bitcoin (BTC) investors after the cryptocurrency’s recent correction. The trader believes that while the expected approval of a spot Bitcoin exchange-traded fund (ETF) will lead to a price surge, most of the buying pressure will come from leveraged buyers instead of spot buyers. As a result, the analyst warns that there may be significant sell-offs in the future. Earlier this week, over $400 million worth of long positions were liquidated as BTC experienced a sharp correction, impacting nearly 120,000 traders.
Short-Term Risks
The Flow Horse also highlights the risks associated with sudden changes in Bitcoin’s price following market-moving announcements. The analyst suggests that it might be safer to remain neutral instead of taking a short position. They emphasize the possibility of a surprise ETF announcement before the year ends and highlight the potential evaporation of offers across exchanges, which could lead to substantial losses for traders who have comfortable margin buffers.
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Current Bitcoin Price
At the time of writing, Bitcoin is trading at $41,125, representing an 8% decrease from its 19-month high on December 8th.
Hot Take: Brace for Impact as Bitcoin Faces Uncertainty
Bitcoin’s recent stumble has prompted warnings from top crypto trader The Flow Horse. With the anticipated approval of a spot Bitcoin ETF on the horizon, leveraged buyers are expected to dominate demand while spot buyers remain cautious. This dynamic has raised concerns about potential washouts and sell-offs in the market. Furthermore, The Flow Horse stresses the risks associated with sudden price fluctuations following major announcements. As Bitcoin faces uncertainty in the short term, traders are advised to proceed with caution and consider their positions carefully.
