Top Crypto Analyst Issues Bitcoin Warning, Says 'Major Washouts Ahead' – Here's What He Means
A widely followed cryptocurrency analyst and trader is expressing bearish sentiment on Bitcoin (BTC) in the short term.
The analyst, known by the pseudonym “The Flow Horse,” tells his 194,800 followers on social media platform X that an announcement regarding the approval of a spot Bitcoin exchange-traded fund (ETF) is causing excitement in the market and could initially cause the price of BTC to rise.
However, The Flow Horse says there is a lack of underlying demand for Bitcoin and buying activity may be dominated by speculators rather than spot buyers who actually believe in Bitcoin's value. According to the pseudonymous analyst, an initial price surge following the ETF announcement could be followed by a sharp correction in Bitcoin price.
“There will likely be major washouts.”
The Flow Horse also says bearish price action for Bitcoin could pre-empt the ETF announcement. According to Bloomberg analysts, the US Securities and Exchange Commission could decide on the status of the spot Bitcoin ETF applications it has received by January 10, 2024.
“Either BTC starts selling in the announcement this week [December 24th – 30th] and then sell even harder after the announcement, or we trade unchanged until then, turn on the announcement and then sell off.
Either way, after ETF approval, lower BTC for a while before it rises again.
Considering how bullish the market is and [how] If someone is willing to bid, I think you can expect the first line of defense to treat any drop towards $40,000 as a gift and bid heavily again using futures contracts. Expect them to be washed out too.”
Bitcoin is trading at $42,829 at the time of writing.
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