Bitcoinโs Strong Uptrend Showing Signs of Weakness, Says Top Trader
A trader who successfully navigated the crypto market breakout in 2023 is now warning that Bitcoinโs strong uptrend is displaying signs of weakness. The trader, known as DonAlt, notes that this is the first time since the approval of spot market exchange-traded funds (ETFs) in January that BTCโs uptrend has shown such indications. In a recent strategy session, DonAlt highlights several concerning factors that suggest a potential bearish turn for Bitcoin.
BTC Uptrend Showing Exhaustion
DonAlt observes that Bitcoinโs uptrend this year has followed a pattern of consolidation followed by upward movements. However, the recent market behavior is different, as consolidation phases have not been immediately followed by upward momentum. This change in character raises concerns about the strength of Bitcoinโs uptrend.
Market Structure on Lower Time Frame
Examining the four-hour chart, DonAlt identifies a worrisome market structure. It appears that BTC holders are taking advantage of rallies to sell their Bitcoin holdings. Combined with Bitcoin trading near its high time frame resistance at $69,000, this setup favors bearish sentiment for BTC.
Potential Shorting Opportunity
The trader clarifies that the current situation does not necessarily indicate an imminent price drop. However, when considering both low and high timeframe concerns together, it opens up the possibility of shorting Bitcoin. DonAlt suggests that these various indicators should be taken into account when making investment decisions.
Bitcoin Price Update
As of now, Bitcoin is trading at $66,163, experiencing a decline of over 4% within the past 24 hours.
Conclusion
The recent market behavior of Bitcoin is causing concern for traders, with signs of weakness in its strong uptrend. The change in character from previous consolidation patterns and the selling activity during rallies raise questions about the future direction of BTC. While this does not guarantee a price drop, it presents the possibility for shorting Bitcoin based on multiple bearish signals. Traders are advised to carefully evaluate these factors before making investment decisions.
Hot Take: Bitcoinโs Uptrend at Risk
Bitcoinโs strong uptrend is showing signs of weakness, leading to potential bearish outcomes. Hereโs what you need to know:
1. Change in Character
- The current market behavior deviates from previous patterns, where consolidation phases were followed by upward movements.
- This change raises concerns about the strength of Bitcoinโs uptrend.
2. Market Structure on Lower Time Frame
- Examining the four-hour chart reveals that BTC holders are using rallies to sell their Bitcoin holdings.
- Combined with Bitcoin trading near high time frame resistance at $69,000, this setup favors bearish sentiment.
3. Potential Shorting Opportunity
- The current situation does not guarantee an immediate price drop but offers the possibility of shorting Bitcoin based on multiple bearish signals.
- Traders should consider both low and high timeframe concerns when evaluating investment decisions.
In light of these developments, it is crucial for traders to monitor Bitcoinโs performance closely and assess the potential risks associated with its current uptrend.
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