Forex Analysis & Reviews: 23.02.2022 - BTC February recovery turns...

23.02.2022 05:14 PM

BTC February recovery turns out bull trap

A cryptocurrency analyst who accurately predicted the bottom of the 2018 bear market warned bitcoin traders that the major cryptocurrency was at risk of breaking support at the level of $30,000

Pseudonymous crypto analyst Smart Contracter wrote on his Twitter account that BTC/USD's recent jump from a low of $33,000 on January 24 to a high of $45,000 on February 10 was likely to be a huge bull trap.

Smart Contracter stated that BTC had failed to hold the 0.618 Fibonacci level. Therefore, it can be assumed that its recent surge was a bull trap. Now, bitcoin is most likely to test the support at $28,000.

Accurate forecasts

Notably, this analyst has previously managed to highlight the major cryptocurrency trend shifts and predict its dips and reversals.

In December, when bitcoin was trading above $50,000 per coin, Smart Contracter predicted its sharp correction to around $25,000.

"What if we take out the June lows again after taking out the April highs all as half of a larger structure that ruins both bulls and bears? I wouldn't rule it out. Also on a side note, I maintained my bullish bias for too long and vastly underestimated the severity and depth of this dip."

Smart Contracter seems to base his evaluation on the market construction of the Dow Jones Industrial Average when it traded in a wide range between 1998 and 2009 before breaking out and igniting a parabolic surge.

Short-term forecasts differ

While Smart Contracter is brief-time bearish on bitcoin, his fellow market analyst Justin Bennett believes BTC is already generating bullish reversal signals on the lower timeframe.

"BTC hourly still looks good. Descending broadening wedge and RSI bullish divergence. That doesn't mean everything is A-OK, far from it. The highest conviction play, in my opinion, is a daily close above $39,600."

I believe the technical picture on the daily chart is more credible for analysis. Besides, the current situation is ambiguous: the level of 39429.77 is tested in both directions. However, it is likely to be insignificant for the medium-term outlook.

As for my hope for BTC recovery, I have repeatedly focused on the level of 34196.86. It was the reason for the price decline in January. Besides, I consider the level of 28346.01 the last bullish stronghold. Therefore, I share Smart Contractor's view in this case.