A closely-followed crypto trader is warning Bitcoin holders, saying BTC could see a cascade of lengthy liquidations in the near future.
Justin Bennett is telling his 111,300 Twitter followers that he believes Bitcoin is likely trading in an expanding wedge pattern and that it could correct to around $20,000 after hitting the formation’s diagonal resistance.
“A bit higher than I thought we might see, but I still think we’re getting the pullback from BTC.
Monkeys become monkeys.”
Source: Justin Bennett/Twitter
Bennett too Remarks that billions of dollars worth of long positions are waiting to be liquidated below $20,800, suggesting that market makers could push Bitcoin’s price lower to tap into the deep liquidity area.
“Over $100 billion (yes, billions) worth of BTC longs remained untouched at $20,800. What could that mean?
While Bennett sees a significant corrective move for Bitcoin, fellow analyst Rekt believes BTC could be preparing for a major breakout on the monthly timeframe.
“I look forward to the next few months for BTC.”
Source: rect/twitter
Looking at the trader’s chart, he seems to be implying that BTC could mirror its price action from late 2014 and early 2019. In both instances, Bitcoin broke off a descending triangle pattern before finally surmounting a key diagonal resistance.
In the short-term, Rekt predicts that Bitcoin could retest resistance around $23,300 before resuming its current uptrend.
“BTC successfully retested the confluent resistance area daily [chart].
That being said, there could still be another drop in the same area after a weekly close.
That would represent a healthy technical retest setup, but weekly this time [timeframe].”
Source: rect/twitter
At the time of writing, Bitcoin is trading at $24,711, a fraction of the daily rise.
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Featured image: Shutterstock/Liu Zishan