A trader who entered a long position on Bitcoin (BTC) as it bottomed out in November of 2022 is revealing why he has disposed of half of his stake in the flagship crypto asset.
In a new video, pseudonymous analyst DonAlt tells his 47,800 YouTube subscribers that he has sold roughly 50% of his Bitcoin stake.
According to DonAlt, one of the reasons he reduced his Bitcoin holdings was technical analysis suggesting that the flagship crypto asset would head lower.
“Where you have multiple time frames at resistance, here for example, the monthly close is at resistance and then you get the weekly closing resistance… so if this has some follow-through on the weekly side of things and we get a red candle, there’s a good chance that this monthly is going to close red as well, which means that the resistance held.
And then technically speaking, there’s a window of opportunity to go to $19,000. Because that’s the best monthly support we have.
It would also be quite nice because it’s like an inverse head and shoulder setup.”
The pseudonymous trader also says that the S&P 500 index retracing made him offload a partial stake in Bitcoin.
“I saw the S&P [500 index] being quite weak into resistance. And I was expecting the S&P to pull back massively and it did. It’s been having a really shitty week, which I expected to kind of spill over into our markets.”
According to DonAlt, the rally by meme stocks such as electric car maker Tesla (NASDAQ: TSLA) and video game retailer GameStop (NYSE: GME) also informed his decision.
“And on top of that we’ve had the meme stock rally. Tesla went from $100 to $200 into resistance. So I think that could mean that we’re getting a little bit of risk off…
If that kind of goes lower, that’s going to kind of spill over into the traditional markets which could spill over into crypto.
you have a bunch of things – you have the monthly resistance, you have weekly resistance. Daily also started to show exhaustion to me anyway…
I was like looking at it at all time frames on Bitcoin, didn’t look that good for the first time since the bottom.
And Tesla had a massive rally, GME rally too…
We’ve had a few indicators showing that maybe we’re going to get some headwind.”
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Generated Image: Midjourney