Nicholas Merten (DataDash) warns of an impending Bitcoin and altcoin sell-off, citing weakening technical indicators and ETF outflows. He urges caution as the market faces serious downside risks.
1. Bitcoin’s Price Action Signals a Correction
Key Highlights:
- Bitcoin has been trading sideways for nearly three months, showing signs of exhaustion.
- The 21-day moving average is acting as strong resistance, pressing price lower.
- Price is being squeezed downward towards the 200-day moving average, a potential breaking point.
2. ETF Outflows Are a Major Red Flag
Key Highlights:
- Over 10,000 BTC have exited ETFs in the last three weeks, the largest outflow month since ETF launches.
- Fidelity and BlackRock’s IBIT have seen net slowdowns, reducing buy-side demand.
- This marks a stark contrast from the strong inflows between October and January.
3. Institutional Sentiment Is Cooling
Key Highlights:
- MicroStrategy’s Bitcoin buying spree has slowed as credit market confidence wanes.
- Large institutions appear hesitant to buy at current prices.
- The rotation from meme coins and hype-driven alts into Bitcoin has not offset institutional outflows.
4. Altcoins Face a Brutal Capitulation Event
Key Highlights:
- Altcoin dominance is breaking multi-year support levels, signaling further losses.
- Many Layer 1 and Layer 2 projects are weak and need to be "wiped out" for a healthier market.
- Solana has broken below its 200-week moving average, showing clear distribution from insiders.
5. Macro Factors: Stocks Could Drag Crypto Down
Key Highlights:
- The S&P 500 is struggling to break its historical resistance channel, hinting at a major correction.
- The NASDAQ is showing signs of exhaustion after three months of stagnation.
- If equities correct, Bitcoin will likely follow, reinforcing a bearish short-term outlook.
6. Risk Management and Market Opportunities
Key Highlights:
- Dollar-Cost Averaging (DCA) is the safest way to navigate uncertainty.
- Upcoming altcoin capitulation will present buying opportunities in stronger narratives.
- Be cautious with leverage trading—downside risks remain high.
🔥 Final Take: Bitcoin is likely heading for a correction as ETF outflows and institutional hesitation weigh on the market. Altcoins are in serious trouble, with dominance breaking down. A broader equities sell-off could compound crypto losses. Stay cautious and look for re-entry points post-capitulation.
