A popular crypto analyst is preparing for a fresh Bitcoin rally as the flagship cryptocurrency wavers around the $35,000 range.
The pseudonymous trader tells his 127,000 Twitter followers why he is bullish on BTC despite its recent price action.
“You’ve seen me posting very bullish tweets these days. This is not random. I’m going to explain some of the reasons why I still think we will see new highs this year.”
The analyst points out that the famous Bitcoin Fear and Greed Index shows fear has overtaken the crypto markets. As Capo points out, creators of the index say this is a sign that traders may have become overly bearish, and a turnaround is likely.
“Market sentiment is very bearish. All I see is people calling for lower prices, saying that the bull market is over, that we are entering a three-year bear market…
This is clearly visible on the Fear and Greed Index.”
Capo also highlights that the Bitcoin funding rates moved deep into the negative during the dip towards $30,000 in late May and remain low, suggesting that the sharp and sudden decline was a capitulation event.
Those shorting Bitcoin may not be in an advantageous position as a consequence, notes Capo.
“Funding rates confirmed the capitulation event, turning very negative after the last drop. It means that the longs got wrecked. When they stay like this for a long period of time it means that the shorts are trapped and an accumulation phase is likely.”
Additionally, the crypto analyst points out that Bitcoin has held the $30,000 level well amid market turbulence.
“Main pivot for BTC remains $30,000. This level has held very well, forming hidden bullish divergences and also regular bullish divergences on many indicators (relative strength index as an example).”
Capo also compares Bitcoin’s recent plunge to its plunge in December of 2020, wherein the asset entered an accumulation zone for a short period of time only to blast up to new all-time highs.
“Now some bullish fractals. BTC December 2020 vs. BTC now.”
Featured Image: Shutterstock/Gulsrud Action Media