Bitcoin Faces 75% Drop Risk as TD Sequential Indicator Triggers Sell Signal

Crypto trader and analyst Ali Martinez has issued an urgent alert regarding Bitcoin, warning of a potential significant correction. Martinez, who has a substantial following on the social media platform X, has cited the Tom DeMark (TD) Sequential indicator as a cause for concern. This indicator, a technical analysis tool used to determine potential trend and price reversal points, has historically predicted major Bitcoin crashes.

Martinez highlighted that the TD Sequential indicator has given a quarterly sell signal, a rare warning that has preceded brutal drawdowns in the past. In 2015, a similar signal appeared, and Bitcoin dropped by 75%. In 2018, the same setup resulted in an 85% plunge. Martinez suggests that if history repeats itself, Bitcoin could drop below $40,000 from its current level of $107,850.

Martinez also pointed out that the number of Bitcoin transactions valued at more than $100,000 has fallen significantly, from 30,840 to 16,860 between May 22nd and June 29th, a drop of around 45%. Additionally, data from crypto analytics firm CryptoQuant suggests that buyer interest for Bitcoin over 30 days has plummeted by 36,988 BTC, signaling a sharp decline in buying interest.

Martinez's warning has sparked concern among investors and analysts, who are closely monitoring the situation. The alert comes at a time when the cryptocurrency market is already facing uncertainty and volatility. Recent developments, including regulatory changes and market sentiment shifts, have contributed to a sense of unease among investors. The trader's alert has added to this uncertainty, with many now questioning the stability of the market and the potential for further declines.

In response to the trader's warning, some investors have taken steps to protect their portfolios, while others have remained cautious but optimistic. The trader's alert has also sparked a debate among analysts about the reliability of the indicator and its ability to predict market movements. Some have praised the trader's track record and the indicator's accuracy, while others have expressed skepticism about its usefulness in the current market environment.

The trader's warning serves as a reminder of the inherent risks and uncertainties associated with cryptocurrency trading. While the market has the potential for significant gains, it is also subject to sudden and dramatic fluctuations. Investors are advised to exercise caution and to carefully consider their risk tolerance and investment goals before making any decisions. The trader's alert highlights the importance of staying informed and being prepared for potential market movements, and serves as a call to action for investors to take proactive steps to protect their portfolios.