Bitcoin on the verge of massive crash - BitMEX's CEO

BTC/USD stays close to the highest level of 2020 amid positive sentiments.
BitMEX CEO expects a massive sell-off from the current levels.

Tanya Abrosimova Independent Analyst

Bitcoin (BTC) is changing hands at $9,335, off the multi-month high hit during early Asian hours at $9,426. The first digital coin has gained over 3.5% in recent 24 hours and over 7% in seven days. The price has printed three bullish candles on a daily chart amid resumed recovery on the cryptocurrency market. At the time of writing, Bitcoin's trading volume reached $33.6 billion, while a market share settled at 66.2%.

Arthur Hayes, the CEO of BitMEX, expects that the rally may be followed by a sharp sell-off

In a recent tween, Hayes noted that the price formed an explosive pattern, where a strong rally usually followed by a sudden crash of a similar magnitude.

Notably, GTI Vera Band indicator, cited recently by Bloomberg analysts, also points to a retracement from an overbought position. The price went outside the upper boundary of the band, which often implies a short-term technical correction within the current upside trend. In this case, BTC/USD may retest $8,500.

However, it should be noted that Hayes's forecasts are notoriously wrong. Thus in March 2019, he tweeted that the winter wasn't over, right before Bitcoin started a massive rallly that took it nearly to $14,000. Most recently he expected a sharp sell-off during the Chinese New Year; however, Bitcoin did quite the opposite.

BTC/USD: technical picture

From the long-term perspective, Bitcoin is moving within an upside trend with the next major target at $9.850 (the upper boundary of the weekly Bollinger band and 161.8% Fibo retracement weekly) and psychological $10,000. Once this area cleared, we will find ourselves in uncharted territory as Bitcoin traded that high only in October 2019. Most likely, this barrier will slow down the upside momentum and trigger a correction before another bullish assault.

On the downside, the first support is created by $9,000-$8,900 area, followed by $8,650. This life served as a strong resistance during the previous week. Now it flipped into support reinforced by SMA100 and SMAA50 on a 1-hour chart. A sustainable move below this area will negate an immediate bullish forecast and bring $8,000 back into focus. It is guarded by SMA50 weekly and SMA100 daily. Bears will have a hard time pushing the price below this area.