Crypto Strategist Warns of Bitcoin Signal Similar to Previous Corrections
A well-known crypto strategist has cautioned that Bitcoin (BTC) is exhibiting a technical reading reminiscent of the signals seen before significant corrective moves in 2016 and 2019.
According to analyst Jason Pizzino, BTC encountered resistance at the Gann 50% retracement level after closing below $42,230 last week. Traders use Gann Indicators to identify support and resistance levels, as well as predict market tops and bottoms.
Pizzino emphasizes that BTC’s weekly close below the Gann 50% level, accompanied by high volume and a reversal bar, indicates a potential downside. He believes that the next major target is the next Gann 50% level at $37,000.
Previous Instances of Resistance
Last week, Pizzino warned that BTC also experienced resistance at the Gann 50% retracement level in both 2016 and 2019. He even shared a chart in December suggesting that BTC might correct after hitting this technical indicator.
Reviewing Pizzino’s chart, it appears that BTC retraced around 70% in 2019 after rallying to its Gann 50% retracement level.
Wyckoff Distribution Schematic and Bitcoin Price Action
Pizzino is closely monitoring Bitcoin’s price action on lower time frames. He notes that BTC holders are currently selling off their coins based on a Wyckoff Distribution Schematic, which traders use to identify market tops. Additionally, the fact that BTC closed under the Gann 50% level is another cause for concern.
Current Bitcoin Price
As of now, Bitcoin is trading at $42,603.
Hot Take: Bitcoin Faces Potential Correction
Analyst Jason Pizzino warns that Bitcoin is displaying similar technical signals to previous corrections in 2016 and 2019. BTC’s recent close below the Gann 50% retracement level, along with high volume and a reversal bar, suggests a potential downside. Pizzino believes that the next significant target is the Gann 50% level at $37,000. Moreover, he points out that BTC previously encountered resistance at this level in both 2016 and 2019. The analyst also highlights Bitcoin’s price action on lower time frames, with sellers currently dominating the market based on the Wyckoff Distribution Schematic. These indications raise concerns about a possible correction in BTC’s price.
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