A trader who rode the crypto breakout earlier this year is issuing a warning, saying that the latest Bitcoin (BTC) and altcoin rallies could abruptly reverse.
In a new strategy session, analyst DonAlt tells his 53,400 YouTube subscribers that the crypto markets are likely rallying because traders are anticipating the approval of multiple Ethereum (ETH)-based futures exchange-traded funds (ETFs).
DonAlt believes that the catalyst is not strong enough to sustain the latest rallies in the crypto markets.
“If you go on the Bitcoin daily chart, we’re right back at the cluster of resistance. I honestly usually wouldn’t care about it too much given we’ve tested it twice before this third test… But what I don’t like is if the market pushes into resistance on basically bull**it news in my eyes… because bull**it narratives unwind really fast…
I don’t like the narrative that is assigned to this, and I generally don’t like how the market is trading right now.”
DonAlt also highlights that crypto futures products have historically been massively bearish for the digital asset markets.
“I also think in general people just forget how the Bitcoin future ETFs went. If you map them out on the chart, it doesn’t paint any good picture. We’ve had most of the Bitcoin futures ETFs [coming out] at the pico-tops of the market.
We had one in [2017] – that ended the bull market basically. Then we had another one basically 2021, if I remember correctly, also pretty close to the top. It’s just generally not the best track record so I’m very confused.”
The Chicago Mercantile Exchange (CME) was the first to introduce Bitcoin futures trading in December 2017 on the same day that BTC printed a cycle high of $20,000. While the CME’s product is not a BTC futures ETF, its launch coincided with the start of a crypto bear market that saw Bitcoin plunge to as low as $3,200 in 2018.
In October 2021, ETF provider ProShares launched the first SEC-approved Bitcoin futures ETF. A month later, Bitcoin recorded an all-time high of around $69,000 prior to starting a bear market.
At time of writing, BTC is trading for $27,065.
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