A widely followed crypto strategist is warning Bitcoin (BTC) traders that the king crypto looks poised for another sell-off event.
The pseudonymous analyst Kaleo tells his 545,700 Twitter followers that Bitcoin has taken out its diagonal support on the one-hour chart and appears ready for a steep correction to $12,500.
“Zooming in, a continuation lower before any type of bounce is the most likely scenario. We’ve already seen the inverse pennant break lower, and the next solid support level converges at the retest of the high timeframe trend breakout and support from 2019-2020 base range highs.”
At time of writing, Bitcoin is changing hands for $16,172, indicating a downside potential of over 22% should BTC hit Kaleo’s target.
Although the crypto analyst believes that an imminent move down is in sight for BTC, he predicts that Bitcoin will abruptly bounce once support reaches around $12,500.
“A V-bottom recovery from this breakdown followed by several months of accumulation chopping sideways into spring 2023 makes sense.”
After a period of sideways consolidation into the first quarter of 2023, Kaleo predicts that Bitcoin will eventually regain its bullish momentum and rally to as high as $40,000.
“I still think the major momentum shift will happen at the breakout of the high timeframe log downtrend as shown in the chart below. I don’t expect that move to lead to a new all-time high, but a move back to the $30,000 – $40,000 range followed by more chop into the next halving.”
The Bitcoin halving, which is slated to happen in March 2024, is a highly anticipated event where BTC rewards to miners are cut in half, effectively reducing the daily emissions of BTC.
Kaleo concludes by saying he could see BTC printing a new all-time high by late 2024 or early 2025.
Featured Image: Shutterstock/Mia Stendal
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