Top Trader: Bearish S&P 500 Means Bitcoin May Have Topped

Nick Chong

Last Updated: June 11, 2024 2:08 pm

2 mins read

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Bitcoin has undergone a strong 50% rally over the past 30 days. The leading cryptocurrency traded as high as $16,500 just hours ago, though has since retraced toward $16,200 as buying pressure has tapered off.

While Bitcoin remains above key support levels, not all analysts think the cryptocurrency has room to extend to the upside. A crypto-asset analyst says that Bitcoin may have topped and may thus face a drop in the days ahead. Many analysts think that Bitcoin is overbought, hence the expectations of a drop in the short to medium term. The drop will likely take the coin toward the $14,000 region, analysts say.

Bitcoin Could Soon Correct, Analyst Says

A leading cryptocurrency trader thinks that Bitcoin has topped in the medium term above $16,300. He shared the chart below just recently, which shows the cryptocurrency’s price action over the past few weeks.

According to the trader, it is unwise to be long on the cryptocurrency right now due to weakness in the prices of equities (S&P 500, Dow Jones, other indices) and a loss of bullish momentum in the Bitcoin market:

“Almost forgot my chart today, was a little busy IRL but a challenge is a challenge. I think going into the wknd you should be very cautious with getting caught long especially with equities being bearish. Don’t see much other than we might have topped. I am flat. I’m a bit groggy but topped on LFT, I would be skewed to taking majority shorts above 16.3k until we open and close monday above this level.”

Chart of BTC's price action over the past few weeks with an analysis by crypto trader Flood (@ThinkingUSD on Twitter).
Source; BTCUSD from TradingView.com

Long-Term Trend Still Intact

Analysts say that Bitcoin’s long-term trend remains intact despite recent price weakness. An on-chain analyst recently said the following, indicating how Bitcoin is still early on in its cycle:

“1/ Relative Unrealized Profit/Loss indicator: Has now entered the ‘Greed’ zone on this latest push up by #bitcoin. Sounds bad but actually we can spend large parts of the bull cycle in this area. We are still early with plenty more room to the upside to go.”

The cryptocurrency seems to have room to extend to the upside as there are still few retail investors interested in the cryptocurrency.