Top Analyst Explains Why 2023 Isn’t the Start of the Bull Market; BTC and ETH Expected to See New Lows

In a recent series of tweets, renowned analyst il Capo Of Crypto presented arguments for why he believes that the current bullish trend in the cryptocurrency market, particularly in Bitcoin (BTC), may not be the beginning of a new bull market. Instead, he suggests that the market could still see new lows in the coming months.

BTC on Higher Time Frames (HTF)

According to il Capo Of Crypto, the recent bullish trend in 2023 should be viewed as a corrective move rather than the start of a new bull market. He points out that the price of BTC is currently at a major resistance zone, and the chart shows confirmations supporting this observation.

BTC on Lower Time Frames (LTF)

On lower time frames, il Capo Of Crypto highlights that a range has formed between $40,000 and $45,000 for BTC. He emphasizes that $45,000 is a strong resistance zone, backed by heatmaps, options gamma wall, and higher time frame resistance. On the other hand, $40,000 is a crucial support level. A clean break below $40,000 could potentially lead to a significant drop to the $30,000-$31,000 range.

Options Expiration Event

il Capo Of Crypto draws attention to an important options expiration event scheduled for December 29th. With a notional value of $7.7 billion, this event aligns with the current support and resistance levels ($40,000 and $45,000) on lower time frames. He mentions that the maximum pain price coincides with the major support zone of $30,000-$33,000.

BTC Elliott Wave Perspective

From an Elliott Wave perspective, il Capo Of Crypto analyzes the bearish trend in 2022 as an impulsive move that broke the bull market trend established in 2020-2021. He suggests that the move from the $16,000 low appears to be a corrective move (wave B/X) and is typically followed by another impulsive move (wave C/Y).

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Reasons Supporting the Bearish View

il Capo Of Crypto provides several reasons to support his belief that the 2023 bullish trend is a wave B/X and not the start of a bull market. These reasons include:

Artificially Inflated Prices: He refers to a tweet where he highlights the inflation of prices. The 2022 bear market wave is also considered impulsive, and many altcoins and indexes are forming the same pattern.
CFTC Allegations and DOJ Access to Binance Books

il Capo Of Crypto mentions that the CFTC alleged market manipulation in March 2023, and the Department of Justice (DOJ) is set to access Binance’s books through a monitor to verify these allegations. He believes that the truth behind market manipulation is gradually coming to light.

Potential Factors Affecting the Market

The analyst also discusses potential factors that could impact the market, such as ETFs, halving events, and a global recession. While ETFs are seen as positive for the mid and long-term, they can have short-term bearish effects. The halving event, although generally bullish, does not guarantee an absence of significant price drops before it occurs. Additionally, il Capo Of Crypto suggests that high interest rates could lead to a correction in the stock market, as historical trends indicate.

ETH and Altcoin Trends

il Capo Of Crypto briefly touches on Ethereum (ETH) and altcoins, noting that ETH has broken a key level and faces resistance at $2,500-$2,600. Money is flowing from BTC to altcoins, which is typically seen in the later stages of a bullish trend. However, the analyst believes that this trend is overextended and nearing its end, which could result in a strong correction.

Sentiment and Conclusion

The sentiment in the market appears to be very bullish, with high levels of funding and overconfidence among participants. il Capo Of Crypto expresses concern about the emergence of questionable narratives, emphasizing the importance of staying objective and maintaining a cool mind.

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Temitope Olatunji
Temitope Olatunji

Temitope is a seasoned writer with over four years of experience. He specializes in Web3 and FinTech topics and enjoys creating content in these areas. He holds both a bachelor's and master's degree in Linguistics. When not writing, he trades forex and plays video games.