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A popular trader known for remaining consistently bearish throughout 2022 says the latest rallies mean nothing and another leg down is imminent.

Pseudonymous trader Capo tells his 703,000 Twitter followers that his bearish outlook has not been invalidated by the big market rebound, which has seen Bitcoin (BTC) rally 21%, Ethereum (ETH) 23% and many altcoins have exploded by 30% or more in the past seven days.

According to Capo, BTC still fails to rupture its most critical resistance around the $21,000-$22,000 area.

The market is bouncing back more than expected. It’s a certainty. Now… is the bearish scenario invalidated?

I’ll explain why I think new lows are still likely…

BTC is still testing major resistance. The weekly close will be key, but there is no bullish confirmation yet.

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Source: Capo/Twitter

Capo says similar resistance is present in the charts of Ethereum, Total Crypto Market Cap (TOTAL), and Total Altcoin Market Cap (OTHER). It doubles its bearish price targets for all instruments, including $600 for ETH.

“It is also clear on ETH, TOTAL and OTHERS.”

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Source: Capo/Twitter
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Source: Capo/Twitter
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Source: Capo/Twitter

The trading veteran also sees weakness in the stock market, which has mostly maintained a directional correlation with cryptocurrencies over the past few years. He says the S&P 500 is forming repeating lower highs and predicts earnings season this quarter won’t go so well for most of the big companies listed in the index.

“The downtrend in traditional markets is also intact. SPX continues to form lower highs all the time and the gain session should be bad.

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Source: Capo/Twitter

Capo’s chart suggests a decline of around 22% for the S&P 500, which closed Friday at 3,999 points.

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Featured Image: Shutterstock/happyframe/Sol Invictus





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