Pakinomist – In a recent tweet, CryptoQuant CEO Ki Young Ju sent a warning to traders highlighting potential market moves and urging caution, especially for those using leverage.
CryptoQuant’s CEO warned that Bitcoin could experience a pullback or move sideways for months. This signals that the current bullish momentum may wane, leading to a period of consolidation or a minor pullback.
Despite the warning, Ju expressed uncertainty about the end of the current bull cycle. According to CryptoQuant, other on-chain indicators remain bullish, indicating that the long-term outlook for Bitcoin remains positive. This mixed signal highlights the speculative nature of predicting market movements and the importance of considering multiple factors.
In line with this, Ju urges caution for those trading with leverage. Leveraged trading can increase profits, but also increase the risk of significant losses. In volatile markets, leveraged positions can be vulnerable to liquidations.
A liquidation occurs when an exchange forcibly closes a trader’s leveraged position because the trader was unable to meet margin requirements. Large-scale liquidations may involve extreme market conditions, such as panic selling or buying.
Bitcoin price action
After two months of consolidation, Bitcoin broke out of its range and on January 20th hit a new record high of $109,358.
The launch of a Securities and Exchange Commission task force on US regulations for digital assets helped lift markets at the start of the week. The task force will create a “comprehensive and clear” regulatory framework and will be led by Hester Peirce, the SEC Commissioner known as “Crypto Mom” for her opposition to SEC enforcement proceedings against cryptocurrency companies.
Bitcoin is trading at around $105,076, up 1.29% in the last 24 hours and slightly below the record high of $109,358 set on Monday. The rest of the crypto market was mixed at the beginning of Monday’s trading session.
On the macroeconomic front, investors await economic data on Wednesday, which may provide clues about the outlook for the economy.
