An analyst who has rightly called Bitcoin’s (BTC) 2018 bear market bottom warns that a weak stock market could trigger another sell-off in crypto.
The pseudonymous analyst Bluntz tells his 224,600 followers on the social media platform X that the S&P 500 appears to be struggling at the 0.618 Fibonacci level after a three-wave rebound.
Bluntz makes predictions based on his interpretation of the Elliott Wave Theory, a technical analysis approach that attempts to predict future price action by tracking the psychology of market participants, which often manifests itself in waves. According to the theory, a bearish asset tends to witness an ABC uptick before resuming its downtrend.
The analyst warns that now is not the time to be optimistic about the stock market or crypto.
“Equities have had a nice rebound from the lows, BUT they seem to be stuck at the 0.618 [Fibonacci level] and so far it’s only been a jump in three waves, so it’s definitely looking a bit sketchy right now.
If they start turning south, it would probably be enough to send crypto lower as well.
Stay safe, not the time to stay long, in my humble opinion. No position is also a position.”
At the time of writing, the S&P 500 is at 4,496 points, below the Fibonacci level of 0.618 at 4,520 points.
Bluntz’s latest analysis appears to be in line with his recent call that Bitcoin likely needs to take more corrective action before reaching a local bottom. The analyst previously said that BTC is likely to drop towards the USD 23,000 price area before basing and starting a new uptrend.
At the time of writing, BTC is worth $25,814.
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Generated image: Midjourney