A trader who rode the 2023 crypto breakout is warning that Bitcoin’s (BTC) strong uptrend is flashing signs of weakness for the first time since the spot market exchange-traded funds (ETFs) were approved in January.
In a new strategy session, pseudonymous trader DonAlt tells his 58,000 YouTube subscribers that BTC’s strong uptrend this year is beginning to show signs of exhaustion.
“Since the ETF candle, we just had consolidation [then] up, consolidation [then] up, consolidation [then] up, up, up. And this one’s the first time where that hasn’t happened, [and it] led to a dump…
This is a little bit of change in character.”
Source: DonAlt/YouTube
The top trader also says he’s concerned about Bitcoin’s market structure on the lower time frame. Looking at the four-hour chart, DonAlt notes that BTC holders appear to be using the rallies to unload their Bitcoin stacks.
Combine the recent selling activity with Bitcoin trading close to its high time frame resistance at $69,000, DonAlt says that the setup favors BTC bears.
“Basically you have these lows, they get run… and what happens is you sell-off, you bounce and people are like ‘Oh, this is the SFP (swing failure pattern). Now it goes up,’ and then it just f****ing dumps…
And it does this over and over and over again and that’s not necessarily a [bearish] sign. It’s a sign of, okay you finally have sellers coming in. It doesn’t have to mean that prices are going to go lower, but it’s the first time that has happened in this rally…
It’s not necessarily a bad sign per se. It’s just the first time that we’ve really had this ever since the ETF times…
There are a few low timeframe concerns, there are a few higher timeframe concerns, which in general if you add everything together opens the possibility to actually just short this thing.”
Source: DonAlt/YouTube
At time of writing, Bitcoin is trading at $66,163, down over 4% in the last 24 hours.
Generated Image: DALLE3
