Crypto analyst Ali Martinez has issued a warning about an imminent short-term correction in the Bitcoin (BTC) market. Martinez, a well-known figure in the crypto space, shared his insights on social media, highlighting the use of the Tom DeMark (TD) sequential indicator in his analysis.
According to Martinez, Bitcoin is on the verge of a pullback, potentially dropping by around 12% from its current value as it approaches the $40,000 mark. Despite the excitement among investors as Bitcoin nears this threshold, Martinez emphasizes the importance of not blindly following the crowd.
Using the TD Sequential indicator on the weekly chart, Martinez points to a significant resistance zone between $38,500 and $42,000. He suggests that this resistance could trigger a correction, bringing Bitcoin down to around $33,000. Martinez plans to capitalize on this dip in the market before anticipating a continuation of the uptrend. However, he notes that the sell signal would be invalidated if the weekly candle closes above $42,500.
The TD Sequential indicator, which tracks price points to identify potential trend reversals, plays a critical role in Martinez’s analysis. According to TD Sequential principles, a count of 13 signals a pause, pullback, or reversal in the current trend. Martinez notes that a reversal point is indicated when nine consecutive candles close lower than the previous four periods’ candles.
Additionally, Martinez highlights the potential downward pressure on Bitcoin due to large amounts of BTC being sold by miners. Since surpassing $34,000 at the end of October, BTC miners have reportedly sold over 5,000 BTC, equivalent to more than $175 million.
Investors are advised to stay informed about these indicators and market dynamics as they navigate the potential correction in the Bitcoin market.