The most hated crypto trader shares Insights about his bearish bias, driven by fundamental and technical factors, which include Binance’s dominance, accusations of price manipulation, and chart patterns that suggest a recession. The trader predicts a significant selloff, with altcoins potentially falling between 60% and 80%, as well as Bitcoin’s primary target at $12,000.
Trading the cryptocurrency market is full of polarizing opinions and controversial figures. Among the most notorious is a much-loathed cryptocurrency trader who has been remarkably candid about his bearish bias.
Under the pseudonym Crypto Capo, he recently shared strategic insights, shedding light on his thought process when analyzing the market. Crypto Capo remains committed to its bearish outlook, with 70% of its portfolio outside of the crypto market. He is selling select altcoins with leverage with 30% remaining in his portfolio.
The renowned cryptocurrency trader anticipates that the market will continue to stall, waiting for significant news to trigger the move. According to Crypto Capo, several altcoins have been breaking key support levels. Likewise, the “0-B/0-X trend lines” are about to do so.
Other altcoins have already hit new lows, confirming that the move up from the December low was simply a correction. The cryptocurrency trader expects a sell-off in the near future. He believes that altcoins could potentially drop 60-80%, and Bitcoin’s main target is $12,000.
Fundamental Factors Driving the Bearish Outlook
First, the Binance effect. Binance, one of the largest cryptocurrency exchanges, owns 70-80% of the BNB supply. With the recent legal challenges, the company is allowed to sell BNB, mirroring the situation with FTT.
Second, price manipulation. The cryptocurrency trader argues that manipulative BUSD fueled the strong bull run in early 2021. Sam Bankman-Fried took similar steps with FTT, albeit publicly. Binance CEO Changpeng Zhao has made a billion-dollar BUSD pool public, and due to regulatory restrictions, no more BUSD can be minted.
Technical Analysis: Signs of an Imminent Recession
Distribution of whales in the dark zone: Crypto Capo maintains the graph below which shows a clear distribution above the dark zone. This could potentially indicate that large investors such as Binance are unloading their holdings. A clean break below this support level at $210, which has been tested multiple times, could confirm this.
The 2022 Low Corrective Pattern: The cryptocurrency trader looks at a corrective pattern formed from the 2022 lows. This type of bear flag could indicate a downtrend.
The striking similarity to the FTT chart: The BNB chart resembles the FTT chart. Crypto Capo believes that the only difference is that the BNB timeline is longer.
Since the range of distribution has been maintained for over two years, the resulting range expansion could potentially drive prices down significantly.
Deciphering the Strategy of a Hated Trader Seems Like the Best Move
While the bearish outlook of this controversial cryptocurrency trader may not be everyone’s cup of tea, understanding his ideas can provide valuable context for market analysis.
By exploring the fundamental and technical factors that shape their strategy, investors can gain a fuller understanding of the current state of the crypto market and make informed decisions accordingly.
By Audy Castaneda
