Here Are the Only Two Scenarios for Bitcoin (BTC) in the Near Future, According to Top Crypto Trader

A closely followed crypto trader is laying out the scenarios he thinks are most likely for Bitcoin (BTC) as it rides out another rocky week in the markets.

In a new strategy session for TechnicalRoundup, pseudonymous analyst Cred says that there are now only two possible scenarios for Bitcoin, with the optimistic option being that BTC finds support at the $30,000 level.

The analyst says there’s a distinction to be made between panic selling brought about by fear, uncertainty and doubt (FUD) versus a more technical sell-off.

“The first option is $30k holds. That may seem self-explanatory, but the base case for being bullish at $30k is essentially all the very urgent [selling], and you can see that the way the market dropped from $60k to $30k on the ‘Elon [Musk] plus China FUD’ as opposed to the very regimented and more programmatic – less liquidation-driven selling we had from the more recent high. There are clear microstructural differences between those moves.”

Cred he expects Bitcoin’s ability to find a bottom and rally after the crash in May of 2021 will hold true again if it can sustain $30,000 moving forward.

“That may sound self-evident, but the reason I bring it up is because how that trade unfolds, if it does unfold… it could be as straightforward as, you take this cluster and however long the reaccumulation takes within this cluster, you are a buyer within that price range [$30,000 – $37,500] and ideally trying to get your average as close to the bottom of the range as you can.”

The trader next considers a more negative outlook for Bitcoin which he refers to as “the market breakdown generational opportunity.”

“The easiest way to describe premise two is that it’s essentially the $6k breakdown at $30k where the market creates a very large, very significant, all-eyes-on-deck level at the range low, which seems like it’s free money to buy every single time as volatility continues to contract.

So bounce from $30k [repeatedly] and you get decreasing volatility as the recurring touches continue until you get a volatility expansion to the downside, and that expansion tends to be pretty meaty and pretty significant.

Very hard to get on board that type of move unless you’re comfortable with uncomfortable entries or chasing momentum far away from the breakdown level. But on average, eyeball a 30% to 50% decline from that major level being broken.”

Cred does highlight how there would need to be a confluence of negative factors, ranging from frightening headlines to risk assets declining across the board, in order for Bitcoin to get dragged down in that manner.

“The world would have to be in a pretty messy place with a lot of surprise in the market in order for that scenario to come to fruition.

However, if there’s one thing I learned from trading crypto after all these years, is to never fully discount even the tail events or low-probability events.”

At time of writing, Bitcoin is down three-quarters of a percent and trading for $37,795.

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The post Here Are the Only Two Scenarios for Bitcoin (BTC) in the Near Future, According to Top Crypto Trader appeared first on The Daily Hodl.