A widely followed trader known for calling this year’s crypto crash is warning that the current market bounce will ultimately turn into a deadly fakeout.
The pseudonymous trader known as Capo tells his 563,000 Twitter followers that the big wave of short liquidations this week will mark the beginning of a correction to a new leg down for crypto markets.
“BTC
We have seen the biggest short liquidations in recent months, proving that this move is a short squeeze and that most people was positioned to the downside (hence the hate I was receiving lately)
Now it’s time for the longs to get trapped.”
While many traders are taking the current strength in crypto and equity markets as a sign of a new bull run, Capo has maintained that a BTC rally to about the $21,000 level would occur before prices reverse and crash again.
“BTC and SPX have reached the main targets. Now what?
I’m expecting low time frame distribution around these levels, for BTC and ETH. Some shitcoins could have scam pumps during this time.
Then the big [hammer] comes.”
With the stock market staying closely correlated with BTC as of late, Capo says that the S&P 500 (SPX) is also set to correct again after what he views as a bear market rally concludes. The trader predicts roughly a 20% correction in the stock index down to the $3,180 level.
“Target reached.”
At time of writing, BTC is trading at $20,824, up 5.6% on the day.
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