Joao Wedson, CEO of the cryptocurrency analysis firm Alphractal, warned in his latest assessment that Bitcoin (BTC) and the market in general may face a strong move in the short term.
In a statement on social media, Wedson highlighted several technical signals and urged investors to be cautious about a potential bearish scenario.
'After reviewing several charts today, the picture is still not completely clear. However, considering the large volume of open buy positions in the market, a significant decline in the coming hours is entirely possible,' Wedson stated in a statement.
Key points in Wedson's assessment are as follows:
Correlation Warning: The heatmap shows a divergence in the correlation between BTC and altcoins, which could be a sign of increasing market volatility. According to Wedson, this type of divergence often precedes a volatility storm.
Altcoin Season Index: Although an increase in the Altcoin Season Index is often understood as a positive signal for altcoins, Wedson notes that BTC 'dislikes' this situation and can often intervene abruptly in the market during this process.
Alpha Quant Sell Signal: Wedson notes that the Alpha Quant algorithm has recently issued a 'sell' signal. He explains that this signal has been anticipated due to selling pressure from some whales and an emerging downward trend technically.
Joao Wedson stated that he does not believe the market is at its final stage, but such volatility could signal the formation of a new price base. He concluded, 'This decline may not be the end, but we must always be vigilant. We particularly need to be wary of potential traps.'