The Bitcoin price has been struggling after crashing more than 20% from its January all-time highs, and has taken the entire crypto market down with it. This has been a point of concern for many investors, especially as BTC continues to struggle. According to a crypto trader, it looks like the current muted trend may end up being even more bearish for the Bitcoin price after all, given the signals that they pointed out could be leading to another crash for the cryptocurrency market.
Distribution Before A Bitcoin Price Crash
In a piece that was published on X (formerly Twitter), Zero Ika noted some developments in the market that could point to another price dump on the horizon for Bitcoin. First of these is the fact that the Bitcoin price currently looks stable. So far, it has been trending between $83,000 and $85,000, but the analyst explains that the supposedly bullish sentiment may not be all that bullish as things could be shifting beneath the surface.
Another signal that the analyst points out is the fact that the market does start to see isolated altcoin rallies independent of what the Bitcoin price might be doing. Looking at the market over the past few days, there have been some worrying rallies that have seemingly come out of nowhere for some altcoins.
For example, coins like Fartcoin and Aergo have seen rallies of over 300% in just a short time, especially when the Bitcoin price has been dumping. Additionally, Mantra’s OM token pumped and then dumped over 90% in a single day. These types of rallies, the trader explains, are not real. “To the untrained eye, it looks like early altseason or a hidden gem finally getting its due but in reality, these rallies are manufactured,” Zero Ika opined.
Apparently, these localized rallies serve a purpose and it is distribution. What this means is that “smart money” use these easy to manipulate altcoins as a way to exit the market, rather than using BTC directly and causing panic. So, they move their capital into these altcoins, which are then artificially propped up and then use the constructed liquidity windows to exit.
“Thin liquidity means price can be walked up with relatively small capital, and once it starts moving, the retail reflex kicks in,” the post read.
The crypto trader explains that the appearance of these events, while they may look bullish, does not mean the start of an altcoin rally, but rather an ending. They explain that the timing of these is never random, and they are usually a warning sign. “So when altcoins start to explode without reason while BTC is flat and wicking through HTF supply areas, zoom out,” Zero Ika said in closing.
Chart from TradingView.com
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