A well-known crypto analyst Nicholas Merten has warned crypto enthusiasts that the Bitcoin price surge that was witnessed recently does not mean that the crypto market is on its way to a bull run. He said that several indications in the market show that the market might experience another bearish trend.
With over 500,000 subscribers on YouTube, the crypto analyst told his audience that the crypto might undergo a reversal after the Bitcoin price surge that was witnessed early this year. He explained that crypto traders and investors should prepare for a possible bear market.
"We have seen stagnation in momentum roughly since back in late January, signs of distribution where institutions are taking advantage of the upward market order flow and buy-side pressure from retail and other speculators and traders in the market."
"On top of that as well, we’ve seen the leading indicator that we utilize for trend reversals flashing, that it’s likely moving lower after a 5% move that we got yesterday. We already started to get some warning signs the other day here, showcasing that the momentum had stalled and a trend reversal is likely in play, but we got a clear decisive move of 5%, the biggest candle move we’ve had since back on January 20th," Nicholas Merten added.
According to Mertens, the signs that Bitcoin is displaying in the market show that it is not yet ready for another major bull run. Those involved in crypto trading should expect the apex cryptocurrency to fluctuate inadvertently. Mertens said they see "signs" that Bitcoin is not yet ready for another bull run.
"The vast majority of those returns have come in, and I think we’re seeing some clear signs that this is not the beginning of another bull market," Merten said.
A Recent Crackdown on Staking from US Regulator a Major Factor
Merten said that one of the major reasons he believes the bear market is not yet over is the recent crackdown on staking in the US. He said that with SEC and its sister regulators going after crypto activities and firms, many investors are currently wary of the market.
"Why am I so confident in this? Because it’s not just Bitcoin, and it’s not just Ethereum. Many investors are probably seeing scary news that might be the initial catalyst for the momentum of the downside, that is, the SEC and other regulatory authorities going after exchanges like Kraken and potentially Coinbase and many other names around offering staking as a service," Nicholas Merten said.
Since Bitcoin won't be the only crypto affected by this crackdown, there might be a general loss of interest from several investors. Merten said that one of the major reasons people buy Ethereum and other proof-of-stake cryptocurrencies is the staking feature.
He said with regulators such as the SEC going after these assets, many investors that trade Ethereum and other assets might withdraw.
In his words, "This is a big feature for a lot of people, and it’s a big reason why a lot of people buy names like Ethereum, similar to buying other names and different types of assets that might give you some kind of yield." If Nicholas Merten's predictions come to pass, it might mean another long bearish run for those involved in crypto trading.