According to Marc Principato of Green Bridge Investing, the Bitcoin bulls should prepare for a bow once the cryptocurrency closes above $ 16,000.
The executive director projected the level as an opportunity for traders to make some profits. He adds that they would most likely bring that money back into the Bitcoin System scam market at a lower level – and he warns optimists not to go long near $ 16,000 as a result.
„Our plan requires 3 things to unfold before we can take any chances,“ Principato said in a note posted on Monday. “First, we need to reach a predetermined level (14,250 to 13,600). Second, we need price actions to have a clear structure (chart pattern, candle pattern, etc.). And third, we need confirmation. “
„As soon as we can measure the risk and determine a favorable probability, we will share our idea and start a new swing trade“
The statement followed the parabolic Bitcoin move from $ 10,500 in September 2020 to [nearly] $ 16,500 in November 2020. Many analysts agree that the prospect of ultra-low interest rates and infinite bond purchases has brought lower returns to the Treasury. That, in turn, has led investors to put money in assets like Bitcoin.
Some also believe that a rising budget deficit, led by the U.S. government’s $ 2.3 trillion coronavirus incentive aid, has poured some of the liquidity into the Bitcoin ecosystem. Other bullish catalysts included institutional investments and PayPal’s decision to introduce Bitcoin buying and selling services on its payment platform.
However, Andrew Gonci, CEO of Green Bridge Investing, comments that Bitcoin traders had already taken over all the upside catalysts by sending the price towards $ 16,500. Now the cryptocurrency is trading at its actual spot rates – an overbought asset that requires some degree of downward correction.
„Most think you’re either all in or all out, but if you bought 100 million bitcoin at 10,000 and it’s now 160 million at 16,000, you will likely take at least 16-32 million off the table,“ added Gonci. “This is how hedge fund managers think; they don’t go on Hopium! “
On-chain analyst Willy Woo, meanwhile, believes that capital is entering the Bitcoin market at record speed instead of leaving it. He quotes the realized price – a metric that measures the estimated average cost base that Bitcoin investors have paid.
“Organic price actions take place when the BTC price is closely related to the investor capital that is going in and out. If it is an inorganic BTC price, it will be dominated by short term derivatives traders „