Prominent crypto analyst and trader, recognized as The Flow Horse, has issued a warning indicating “That There are probably larger washouts coming soon.”
The warning stems from the expectation of a spot Bitcoin ETF approval, which is likely to boost BTC prices. However, The Flow Horse notes that much of the momentum will be driven by leveraged buyers as there is less demand from spot buyers, posing a risk for larger corrections.
Analyst Advises Caution Amid ETF Anticipation
The pseudonymous analyst emphasizes the risk associated with significant price changes in Bitcoin following major announcements, particularly warning traders about short positions.
Anayist The Flow Horse suggests that it might be safer to remain flat than express a short position, considering the uncertainty associated with the potential surprise announcement of the ETF before the end of the year.
The analyst underscores the unique nature of the ETF announcement, highlighting the possibility of a sudden and extreme market reaction. The warning extends to potential liquidations, especially for those holding short positions with perceived comfortable margin buffers.
Liquidations Topping $475 Million
The recent correction resulted in substantial losses, with over $475 million in long positions and $73 million in shorts. High funding rates contributed to an uncertain market environment, leading to the widespread unwinding of leveraged bets.
Major liquidations occurred on platforms like OKX ($190 million), Binance ($148 million), and Huobi (nearly $60 million).
Despite the market downturn, some argue that Bitcoin’s recent rally is grounded in strong fundamentals. They point to the consistent growth in Bitcoin-related activities, signaling renewed enthusiasm in the market.
As traders navigate this uncertain phase, The Flow Horse’s warning serves as a reminder to approach the market with caution, considering potential surprises and increased volatility surrounding the impending ETF decision.
