A closely watched analyst is painting a scenario that would doom crypto traders looking to make quick and easy profits this year.
Trader Justin Bennett tells his 110,800 followers on social media platform X that he keeps a close eye on the TOTAL chart, which tracks the market capitalization of all crypto assets.
Bennett shares a chart showing that TOTAL may be mirroring the price action of 2019, when it respected the 0.618 Fibonacci retracement level before a deep corrective move of around 70%.
According to the trader, it is within the realm of possibility for the entire crypto market to correct and consolidate over the next twelve months before soaring to new all-time highs.
“What if everyone gets the timing of this Bitcoin bull market wrong?
What if the maximum pain for crypto goes sideways over the next 12+ months?
People will say it will never happen again because the last time was Covid, which was a one-off.
That’s right, it was a one-off.
But markets don’t repeat themselves; they rhyme.
Bottom line: If you can’t think of this possibility without getting emotional, you’re over-leveraged!”
Looking at the trader’s chart, he seems to predict that the total market capitalization of all crypto assets will fall to around $700 billion later this year, before rising to a new all-time high above $4 trillion in 2025.
At the time of writing, TOTAL is trading at $1.653 trillion, which suggests a devaluation of around 57% if it reaches the trader’s downside target.
As for Bitcoin (BTC), Bennett thinks bears have the upper hand as long as the crypto king trades below $44,500.
“After testing the channel resistance I shared for weeks (against the dollar), $44,500 is now resistance for BTC.
Bulls need to regain that in the higher time frames to have a shot at $50,000.
But in my opinion, caution is needed if you stay below that level.”
At the time of writing, Bitcoin is worth $43,029.
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Generated image: Midjourney