One widely-followed crypto analyst is looking at traditional stocks with “huge implications” for crypto traders.
Analyst Justin Bennett tells his 111,400 Twitter followers that the outcome of the current triangle pattern on the Dow Jones Industrial (DJI) could affect crypto in 2023.
“This is the DJI triangle that could have huge implications for stocks and crypto this year.
Still coiling. Blue levels are the measured objectives depending on the direction it breaks.”
Next, Bennett breaks down Bitcoin (BTC) volume levels. The trader says recent BTC price movements were foreshadowed by volume weakness.
“Sometimes all you need is volume.
The recent bearish divergence between the higher highs from BTC and lower highs from volume signaled weakness.
That was a massive foreshadowing of this week’s drop.”
Bennett also says BTC’s volume levels preceded similar volatility in April 2021.
“And this isn’t the first time Bitcoin has warned us via a drop in volume.
Even the April 2021 peak was foreshadowed by a decline in volume for three straight months.
I tweeted about this in late April.”
Though a drop in volume doesn’t always indicate a price drop, Bennett says it’s a metric for traders to keep an eye on.
“You won’t always get a drop in volume to warn of an upcoming correction. But when you see a market making higher highs and volume making lower highs for two weeks or longer, it’s time to pay attention.”
BTC is worth $21,652 at time of writing, down 4% on the day.