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Home Cryptocurrency news Bitcoin

Bitcoin’s Powell Pump Could Be Crypto Market Shakeout Claims Pseudonymous Trader

Tony Spilotro by Tony Spilotro
8 months ago
in Bitcoin, Cryptocurrency news, Technical analysis
Reading Time: 3min read
Bitcoin’s Powell Pump Could Be Crypto Market Shakeout Claims Pseudonymous Trader

Pump and Dump Buy Sell Stocks Market Ticker 3d Illustration

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This morning, just as the Fed’s Jerome Powell began his speech, Bitcoin started pumping in a fast-moving short squeeze, driven by inflation narrative.

However, the move just as quickly reversed, plummeting back down to lower than where the pump first began. Traders are calling the move a well-time shakeout. But what comes next for the cryptocurrency?

Bitcoin Blasts $300 In An Hour, Tanks $300 Moments Later

Investors and traders were watching markets like a hawk this morning, expecting some type of movement either way in response to Federal Reserve Chairman Jerome Powell’s speech.

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The Fed pledged to keep the inflation rate as close to 2% as possible, but the lack of confidence in recent monetary policy has encouraged investors of all sizes to explore Bitcoin.

More and more small-time investors are buying up the asset in anticipation of higher prices, while institutions and corporations are now considering the cryptocurrency as an economic hedge and treasury reserve asset.

Related Reading | Bitcoin Crossroads: Indicator Signals Short-Term Top, But Final Bullish Impulse Is Possible

The safe haven and hyperinflation narratives surrounding Bitcoin had buyers quick on the trigger this morning during Powell’s speech. But those buyers quickly were met with strong resistance, and the entire pump was erased just minutes later.

Was this a rejection, normal price action, or was this a well-designed shakeout before a much larger move?

BTCUSD 15M Post Powell Speech Pump & Dump Shakeout  | Source: TradingView

Was Today’s Powell Pump An Orchestrated Crypto Market Shakeout?

As big as Bitcoin is compared to other crypto assets, it is still illiquid compared to gold or stocks in scope. It takes much less money to move or manipulate crypto markets, giving whales an edge when it comes to trading Bitcoin.

Markets can be unpredictable, but sometimes even the unpredictable gives signals before a sudden move. For example, a cryptocurrency trader recently outlined what a crypto market shakeout looked like, using a real-life example from a recent pump in Basic Attention Token.

Related Reading | “Upside Reversal” In Bitcoin Possible, Here’s What To Watch For

Before the pump took place, trading became erratic in an attempt to confuse traders and send them to the sidelines. Then, just as price action cooled off, prices plunge, only to quickly reverse and pump an enormous amount.

Today’s shakeout, if it was one, could be the same situation yet in reverse. After strange price action, Bitcoin pumped on Powell’s speech but quickly was rejected back down. If Bitcoin tanks from here, the shakeout will be confirmed.

btcusd bitcoin darth maul

BTCUSD 4H Post Powell Speech Darth Maul  | Source: TradingView

The pump would have been designed solely to shake short traders out of position before the real move down takes place, claims one crypto trader.

However, this all could be part of the plan. Today’s move left a Darth Maul candle on 4-hour timeframes. These candles often appear as shakeouts ahead of a bigger move. BTCUSD falling after several days has resulted in a TD 9 buy setup on the TD Sequential indicator.

This could indicate that the shakeout was not just to shake out shorts, but shake out traders on both sides of the trade.

Tags: bitcoinbtcbtcusdBTCUSDTcryptofederal reserveJerome Powellshakeoutxbtxbtusd
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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