In a recent analysis, renowned cryptocurrency analyst Il Capo of Crypto, known for his bearish predictions, shared his latest views on the market. He presented various arguments supporting his perspective that the market may witness new lows in the coming months.
Il Capo of Crypto believes that despite the upward trend observed throughout 2023, this is only a corrective move and not the beginning of a new bull market. According to the analyst, the price of Bitcoin (BTC) is currently in a major resistance zone.
According to il Capo, a range was formed between $40 thousand and $45 thousand. The price must surpass the previous high, with $45,000 a strong resistance zone. According to the analyst, falling below the key support level of $40,000 could trigger a significant decline towards the $30,000 to $31,000 levels.
According to the analyst, an important option expiration event will take place on Friday, December 29. With a face value of $7.7 billion, the gamma walls are perfectly aligned with their current short-term support and resistance ($40,000 and $45,000). The maximum loss price falls within the main support zone of $30 thousand to $33 thousand.
il Capo claims that the rally in 2023 is unnatural and lists the reasons as follows:
- Prices were artificially inflated.
- The 2022 bear market wave was clearly reactive.
- Almost every altcoin and index forms the same pattern.
- The main trends were ETF and BTC halving.
According to the analyst, although ETFs may be beneficial in the medium and long term by facilitating the entry of significant institutional and individual capital into the market, they can lead to decline in the short term. They can trigger or further delay a 'sell event'. The halving is also a bull event, but it cannot prevent strong crashes before it happens. For example, in 2020 the halving was in May, but prices had fallen significantly during the Covid crash in March.
According to the analyst, we may also be on the verge of a global recession. Interest rates have been kept too high for too long, and even if the Fed backs down, historically this has signaled the beginning of a strong correction in the stock market.
il Capo states that money flows from BTC to altcoins, a phenomenon usually observed in the final stages of an uptrend.
*This is not investment advice.