Will Clemente: Indicators Suggest A Near Term Bitcoin Bear Trap
According to Will Clemente, a top on-chain analyst, several key indicators could be pointing to a potential bear trap playing out in the short term.
Clemente applied a famous trading schematic known as Wyckoff accumulation to Bitcoin’s price action. Wyckoff developed his ‘method’ to train the general public, how large market players operate in a trading pattern where an asset trends in a range-bound construction allowing big players to accumulate, or in other words drain profits from the smaller investors.
After a recent rally to $42,500, Bitcoin is likely to pull down slightly before “springing” back to make new highs, predicts the analyst
“Still think we go down a little more for the spring through $42,000.”
The analyst also refers to the stock-to-flow (S2F) deflection model to show that Bitcoin looks primed for another rally after bouncing off its lower trendline. Glassnode explains that the S2F deflection model is used to determine whether an asset is overpriced or underpriced in relation to its scarcity. If the model goes below 1, it indicates the asset is undervalued.
“Historically speaking, following each touch of this lower S2F deflection trendline Bitcoin has gone on an absolute tear.”
For S2F fans:
Historically speaking, following each touch of this lower S2F deflection trendline Bitcoin has gone on an absolute tear. pic.twitter.com/K7ucOS9YCO
