Cryptocurrency investors have been living a dreamlike period with high optimism in the short term, fueled by the anticipation of ETF approvals, markets moving away from FUD, optimism about interest rate cuts, and the quiet shelving of Binance‘s issues by the US. However, the dream may be on the verge of disruption as experienced investors sound the alarm bells.
While the crypto community enjoys a positive morale, there’s an underlying risk of unpleasant surprises. The level of market experience varies among investors, but those with sufficient experience are issuing important warnings.
A popular crypto analyst, CryptoCon, alerted his followers on January 1st about the possibility of Bitcoin‘s price not being too far from the $30,000 mark. His cautionary statement was based on the DMI (Directional Movement Index) data, which indicated a potential downturn.
CryptoCon pointed out that the DMI data had reached a zone that signaled a bearish alarm. He had been bullish on Bitcoin throughout 2023, but the data now suggests a cooling-off period before the start of 2024, sparking a debate between those who believe this time will be different and those who trust the long-term data.
If historical DMI data proves accurate, CryptoCon could proudly claim his foresight. On the other hand, should the scenario play out differently, his predictions might be forgotten by the time they are proven wrong. The DMI, developed by Welles Wilder in 1978, measures trend strength and is closely monitored by experts.
The DMI readings from mid-2019 resembled today’s situation, which was followed by a 16-month decline. Despite the differences between the current situation and the COVID era (including ETFs, interest rate cuts, halving, etc.), CryptoCon anticipates a potential 30% retracement, albeit not as severe as before, hinting at a price correction to around $30,000.