Analyst Reveals Max Pain Scenario for Cryptocurrencies, Says Caution on Bitcoin as BTC Trades Below This Level
A closely followed analyst is painting a scenario that would spell ruin for crypto traders looking to make quick and easy profits this year.
Trader Justin Bennett tells his 110,800 followers on social media platform X that he is keeping a close eye on the TOTAL chart, which tracks the market capitalization of all crypto assets.
Bennett shares a chart showing that TOTAL may be mirroring its 2019 price action, when it respected the 0.618 Fibonacci retracement level before embarking on a deep corrective move of around 70%.
According to the trader, it is within the realm of possibility that the entire crypto market corrects and consolidates in the next 12 months before reaching new all-time highs.
“What if everyone misjudged the timing of this Bitcoin bull market?
What happens if the maximum pain for crypto goes sideways to down over the next 12+ months?
People will say it will never happen again because the last time was Covid, which was a one-time thing.
That's right, it was a one-time thing.
But markets don't repeat themselves; they rhyme.
Bottom line: If you can’t think through this possibility without getting emotional, you’re in over-indebtedness!”
Source: Justin Bennett/X
Looking at the trader's chart, he appears to predict that the total market cap of all crypto assets will fall to around $700 billion later this year before reaching a new all-time high of over $4 trillion in 2025 will rise.
At the time of writing, TOTAL is trading for $1.653 trillion, suggesting a depreciation of around 57% if the trader's downside target is met.
As for Bitcoin (BTC), Bennett believes the bears have the upper hand as long as the crypto king trades below $44,500.
“After weeks of testing the channel resistance I shared (on the dollar), $44,500 is now the resistance for BTC.
Bulls need to recapture this on the higher time frames to have a chance at $50,000.
But below this mark, in my opinion, caution is warranted.”
Source: Justin Bennett/X
At the time of writing, Bitcoin is worth $43,029.
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