Analyst elucidates reasons for avoiding shorting Bitcoin presently
Bitcoin’s (BTC) price volatility provides opportunities for both long and short trades. However, an analyst has explained why shorting Bitcoin is not advisable at the moment. In a recently uploaded video, CrypNuevo analyzed Bitcoin’s price chart in both high and low time frames. While the low time frame may offer short opportunities for day traders and scalpers due to its higher volatility, swing traders should avoid opening short positions as indicators suggest that Bitcoin will continue to rise. The analyst also looked at the Bitcoin Dominance Index, which showed a 59% dominance at the time of recording. Bitcoin was trading around $68,800 during the video.
Analyzing the weekly and daily price charts, CrypNuevo explained that Bitcoin is currently in a high time frame bull market. The analyst highlighted the 50-week exponential moving average (1W 50EMA) as a leading indicator of market cycles. The weekly price chart clearly showed how breaking above the 1W 50EMA marked the start of a bull market, while breaking below it indicated a bear market. Since Bitcoin is currently trading strongly above this key moving average, opening a short position would offer poor risk-reward ratios.
Looking at lower time frames, CrypNuevo analyzed the four- and one-hour price charts. However, the most relevant lower time frame chart is the one-day frame, which was considered in the video. The analyst highlighted a bullish breakout from a seven-month downtrend channel, which aligned with their expectations for a channel breakout. According to CrypNuevo, a channel bullish breakout does not occur immediately after touching the channel’s support. Instead, it is typically preceded by a resistance test and a 50% range retracement. This is exactly what happened in early October, leading to the breakout on October 15.
For the current week, CrypNuevo is watching a key level between $72,000 and $73,800, which is Bitcoin’s all-time high. This zone is considered “full of liquidity” and is seen as a likely target. However, the analyst warned that if Bitcoin drops below $64,115, it could invalidate the analysis and potentially break a key “W” pattern that is driving Bitcoin’s upward movement. Losing this support would also suggest a fake breakout and bull trap, leading Bitcoin back inside the downtrend channel.
Other analysts, including previously bearish Alan Santana, have made bullish predictions for Bitcoin, with some projecting a run above $130,000. Additionally, Tether’s stablecoin USDT has reached a $120 billion capitalization, which could indicate an upcoming rally. As “Uptober” unfolds, a bull market in the lower time frames seems to be returning, creating opportunities for altcoin positions. CrypNuevo advises considering positioning in altcoins, as they have been buying them over the past few months. However, it’s important to remember that the market is volatile, and even experienced analysts can make mistakes.
