Technical analyst Tony Severino has disclosed why he is no longer optimistic about BTC and other digital currencies following the recent Bitcoin value decline. The analyst previously suggested the potential for the leading cryptocurrency to plummet to as low as $22,000.
Expert Explains His Shift from Optimism in Light of Bitcoin Price Decline
In an X post, Severino referred to market cycles and the Elliott Wave Theory to clarify his change in perspective regarding BTC and other digital assets. In his related chart, he noted that the Bitcoin value achieved a 100% increase in both Wave 1 and Wave 5 during this bullish trend, which commenced around November 2022.
The analyst stated that this indicates the peak is reached, as Wave 1 and Wave 5 usually show comparable price increases. Nevertheless, he mentioned that there’s still a chance for the Bitcoin value to rise further, as it might see a gain similar to what was recorded in Wave 3 after the Bitcoin ETFs were introduced last year.
According to the Elliott Wave Theory, a minimum of two Waves must demonstrate similar price increases, suggesting that Wave 5 could mirror Wave 3’s performance. However, Severino seems to be betting against this outcome as he pointed out the excitement surrounding Donald Trump’s inauguration as an additional reason he believes the peak has likely occurred and explains his lack of optimism regarding the Bitcoin value. He commented that the excitement phase typically occurs just prior to the cycle peak.
The technical analyst acknowledged that the enthusiasm around Trump’s inauguration didn’t meet his expectations. Nevertheless, he went on to emphasize a trend associated with the cyclical peaks, which serves as another rationale for his diminished enthusiasm regarding BTC and other cryptocurrencies. Severino noted that Wave 1 and Wave 3 both peaked precisely at the cyclical peak. Hence, he stated that it’s reasonable to assume that Wave 5 will also peak at the cyclical crest.
Additional Indicators Suggesting BTC Has Reached Its Peak
Tony Severino also referenced other chart patterns and signals, indicating that the Bitcoin value has peaked and elaborated on why he is no longer optimistic about BTC. He pointed out a curved trendline in a different chart, showing that the leading cryptocurrency has reached the maximum financial opportunity point in this market cycle.
The technical analyst continued to highlight indicators like the Parabolic SAR (Stop and Reverse), which suggests that the Bitcoin value’s parabolic phase in this cycle has ceased and a reversal may be approaching. Another indicator he referred to is the Average Directional Index (ADX), which Severino stated demonstrates that BTC’s upward trend strength is faltering.
He affirmed that the upward momentum for the Bitcoin value is subsiding, and it appears unlikely to recover in the near future. The analyst pointed out the Logarithmic MACD as another indicator reinforcing the notion that momentum for the leading cryptocurrency in this market cycle is diminishing.
Featured image from Adobe Stock, chart from Tradingview.com
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