A closely followed crypto strategist thinks that crypto bulls are being set up for a big trap as traders appear to be front-running a potential sell-off event.
Pseudonymous analyst The Flow Horse tells his 191,700 followers on the social media platform X that most market participants appear to still be very bullish on Bitcoin (BTC) and crypto even after the massive liquidation event witnessed earlier this week.
“I am cautious about everyone taking just yesterday’s long liquidations as a signal to be very bullish again when we are on the cusp of what should be a major sell-the-news event. Thinking the trap is being set.”
The analyst might be referring to the potential approval of spot market Bitcoin exchange-traded fund (ETF) applications. Bloomberg analyst James Seyffart previously predicted that regulators are gearing up to greenlight the bids next month.
Veterans in the industry have been cautious about the potential impact of the approval on the price of BTC. Chris Burniske, the founder of Placeholder Capital, recently said that the event will likely not be bullish for BTC.
“That said, still think BTC ETF approval window around January 10, 2024 is a fade:
- Rejections: sell-off.
- Approvals: everyone that’s gonna buy, bought in anticipation.
Marketing machines of TradFi (traditional finance) giants will take time to turn on and convert the approvals into buying flows.
Fade.”
According to The Flow Horse, it is now within the realm of possibility for Bitcoin to see prices below $40,000.
“Where does the market need to go to get the most people involved? Probably around $38,000-$39,000. Right here feels too organized.”
At time of writing, Bitcoin is trading for $40,994.
