A popular crypto trader says Bitcoin (BTC) could be flashing a signal that means its price woes are about to turn around.
The pseudonymous crypto analyst known as Cheds tells his 35,700 YouTube subscribers that BTC flashed a “false break” after briefly plummeting below $40,000 on Monday.
Bitcoin has since rebounded and is currently trading at $43,691.93.
Explains the trader,
“One of the most powerful signals in all of technical analysis is where you have a ‘false break’ and a run.
So in my analysis in Bitcoin Live – other people have talked about this, this isn’t like genius-level analysis – but I basically told them, ‘Hey if we dip below $40k, and we don’t pretty much immediately recover it, we’re in major trouble. But if we dip below $40k and we get back above it, you want to buy it.’
… So we had that false break. We had that spring below $40k, and what does that do? That sets up a change in momentum. Now we need follow-through.”
In October, Cheds said there was a strong possibility that a Bitcoin futures exchange-traded fund (ETF) would launch. He also predicted that this would send BTC on a rally that topped out somewhere around $64,000, and then it would correct down to $40,000.
The trader also predicted that after Bitcoin corrects to the $40,000 level, an ascending triangle would form. Ascending triangles often suggest breakouts to the upside when validated.
Cheds notes in his new video that Bitcoin flashed the same spring that happened when it briefly dipped below $30,000 in July.
Does that mean BTC is about to break out via an ascending triangle? The analyst says he doesn’t know.
“Now the $30k spring brought us to $67-69k. Will the $40k spring get us right back on track for the weekly ascending triangle to $100k?
I don’t know. I really don’t know.”