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A closely followed crypto strategist believes that Bitcoin (BTC) is setting up bulls to believe that the $20,000 area could be the bear market bottom.
Pseudonymous analyst Pentoshi warns his 600,100 Twitter followers that Bitcoin has touched support around $20,000 three times in span of about a month.
“Things that look safe, but aren’t… Can we go up? Yes. Will these almost certainly get run and or lead into a nuke. Also yes. These almost always setup as a trap for longs that build over time thinking it’s ‘titanium support'”
In technical analysis, bouncing off a support level multiple times suggests that a breakdown is in sight as demand at that particular price area gets exhausted.
Pentoshi also says that retail traders likely bought Bitcoin near the top of BTC’s recent rally, indicating more downside risk as those who got in late prepare to cut their losses.
“It’s interesting to note that despite people claiming they bought the bottom, most BTC changed hands at $24,000 where spot was distributed.”
The crypto strategist also highlights that Bitcoin is now trading below the 200-week moving average, an indicator that has marked the bottom for BTC during its previous bear cycles.
“BTC weekly 200 moving average enjoyooorrsss.”
At time of writing, BTC is swapping hands for $21,400 while the 200-week moving average is hovering above $23,000.
As for Ethereum (ETH), the crypto analyst warns that the leading smart contract platform just respected a crucial resistance level, suggesting that the downtrend is very much intact.
“The story writes itself. ETH.”
At time of writing, ETH is trading at $1,642, below Pentoshi’s marked resistance at $2,000.