A closely followed analyst is laying out a scenario that would bring ruin to crypto traders who are looking to make quick and easy gains this year.
Trader Justin Bennett tells his 110,800 followers on the social media platform X that he’s keeping a close watch on the TOTAL chart, which tracks the market cap of all crypto assets.
Bennett shares a chart that shows TOTAL may be mirroring its 2019 price action when it respected the 0.618 Fibonacci retracement level before a deep corrective move of about 70%.
According to the trader, it is within the realm of possibility for the entire crypto market to correct and consolidate for the next 12 months before surging to new all-time highs.
“What if everyone has the timing of this Bitcoin bull market wrong?
What if max pain for crypto is sideways to lower for the next 12+ months?
People will say it’ll never happen again because the last time was Covid, which was a one-time thing.
That’s true, it was a one-time thing.
But markets don’t repeat; they rhyme.
Bottom line: If you can’t think through this possibility without getting emotional, you’re overleveraged!”
Looking at the trader’s chart, he appears to predict that the total market cap of all crypto assets will plunge to about $700 billion later this year before rallying to a fresh all-time high above $4 trillion in 2025.
At time of writing, TOTAL is trading for $1.653 trillion, suggesting a devaluation of about 57% if it hits the trader’s downside target.
As for Bitcoin (BTC), Bennett thinks that bears have the upper hand as long as the crypto king is trading below $44,500.
“After testing the channel resistance I shared for weeks (to the dollar), $44,500 is now resistance for BTC.
Bulls need to reclaim that on the higher time frames to have a shot at $50,000.
But caution is needed while below that mark, in my opinion.”
At time of writing, Bitcoin is worth $43,029.
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Generated Image: Midjourney
