A top analyst known for calling Bitcoin (BTC) bottoms is warning that the rallies witnessed by the crypto markets to start the week may been a bull trap.
Pseudonymous analyst Bluntz tells his 279,800 followers on the social media platform X that Bitcoin looks short-term bearish after failing to rally above 0.618 Fibonacci level.
Traders use Fibonacci levels to identify potential support and resistance levels.
Says Bluntz,
“Gut is telling me these early-week crypto pumps might have been a trap.
Had a good look at DXY and ES (S&P 500 E-mini futures) today and gave myself a bit of a reality check.
Weekly divs on both were confirmed and BTC so far rejecting from the 0.618 Fib.”
At time of writing, Bitcoin is trading for $62,087, a fractional decrease on the day.
According to Bluntz, Bitcoin’s pullback comes as the US dollar index (DYX), which tracks the value of the US dollar against a basket of major fiat currencies, is flashing signs of strength. He shares a chart suggesting that the DXY has confirmed a bullish divergence on the weekly chart, indicating that the US dollar is poised for rallies.
Meanwhile, Bluntz says the S&P 500 is printing a bearish divergence – a potential reversal signal.
The DXY has historically been inversely correlated with the movements of risk assets. When the DXY is strong, it suggests that investors are unloading assets such as Bitcoin and stocks in favor of the US dollar.
At time of writing, the DYX is hovering at 102 points while the S&P 500 is trading at 5,751.
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on X, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
The post ‘Reality Check’: Top Trader Says Latest Crypto Rally May Have Been a Trap – Here’s Why appeared first on The Daily Hodl.
