A widely followed crypto strategist believes that Bitcoin (BTC) and crypto are due for a huge upside burst following a massive liquidation event.
On Monday, the crypto market witnessed over $1.58 billion in liquidations, mostly levered long positions, within a 24-hour period amid a slew of bearish developments.
Bitcoin itself plunged to a three-month low of $86,141.
Following the corrective move, pseudonymous analyst Capo tells his 119,452 Telegram subscribers that a big relief rally is in the cards for the crypto market.
“A strong bounce seems likely.”
According to the analyst, the rally will be triggered by a short squeeze, which occurs when a sharp rise in the price of an asset forces traders who had previously sold short to close their positions. Short selling means selling borrowed shares of a stock with the expectation that the price will fall.
But the trader warns that once the short squeeze has run out of fuel, crypto will likely witness a capitulation event that paves the way for rallies to new record levels.
“Still thinking we get a strong short squeeze before the bigger drop comes.”
Looking at Bitcoin, Capo thinks that Bitcoin can rally to $100,000 before capitulating to as low as $80,000 to set the scene for a push to a new all-time high.
At time of writing, Bitcoin is worth $88,329.
Turning to Ethereum, the analyst thinks ETH will follow a similar path before climbing to a new all-time high of $5,000.
“ETH idea.”
Looking at the trader’s chart, he seems to predict that ETH will soar to $3,000, followed by a move below $2,000 to set the stage for a surge to a new record high.
At time of writing, ETH is trading for $2,481.
He also has the same outlook for Solana (SOL), predicting that it would first rally to $185 and plunge to $120 before a subsequent reversal to $310.
At time of writing, SOL is trading at $143.93.
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Generated Image: Midjourney
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