Top Trader Issues Warning, Says Crypto Rally May Be Overheated and Lacking New Capital for Next Leg Up

By The Daily Hodl April 10, 2024 In Bitcoin
Source: Rekt Capital/X

A closely followed crypto trader is warning that the digital asset market may be overheated and lacking new liquidity.

Pseudonymous trader The Flow Horse tells his 209,800 followers on the social media platform X that the crypto market may decline while heading into the halving event when Bitcoin (BTC) miners’ rewards are cut in half.

The halving event is expected around April 20th.

“Quick thoughts: the closer we get to halving the more likely I am to reduce some risk for a short period of time. Almost everyone is staring at this structure waiting for the same move, which often sets up an ugly countertrend trap.

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Funding rates are having a hard time heating up again, which to me after the initial overheating is more of a sign that the market does not have enough capital at these levels to continuously bid.”

The trader also believes that there is a close correlation between the price action of both the stock market and crypto, and that any move in digital assets will have to coincide with equities.

“If you are calling a top on crypto right now you need to be calling a top on the stock market as well. There is no way around this.”

However, the trader says he is remaining hopeful Bitcoin will continue its rally to the upside.

“They say a watched pot never boils, but I hope a watched Bitcoin breaks up and out.”

The crypto analyst pseudonymously known as Rekt Capital believes Bitcoin can remain in an uptrend as long as it can hold the key level of about $69,000 on the weekly chart.

“BTC is rejecting strongly from the blue $71,300 resistance. However, still holding the old all-time highs (ATH) as support (black). Unless this old ATH range low gives way, Bitcoin is consolidating in between these two levels.”

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Source: Rekt Capital/X

Bitcoin is trading for $68,901 at time of writing, down 4.1% in the last 24 hours.

Featured Image: Shutterstock/RealmDrifter/Konstantin Faraktinov

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