Il Capo di Crypto in this statement highlights the dynamics of the crypto market which is often very volatile and easily influenced by external factors and manipulative actions. To expand the explanation, we can see his statement from several perspectives:
1. Pump and Dump (P&D) and Market Manipulation:
Pump and Dump is a phenomenon where the price of an asset, especially altcoins with low liquidity, is rapidly increased (pump) only to be sold quickly by the perpetrators who orchestrated the scenario, causing the price to fall again (dump). The perpetrators who usually engage in P&D often use perpetual contracts (continuous contracts that do not have an expiration date) and spoofing (where market participants place large orders with the intention of canceling them before they are executed) to encourage other traders to buy, driving the price up. In this context, Il Capo warns that the price movement seen yesterday was influenced by such manipulative practices, which seek to trap people near resistance levels.
What is Spoofing?
Spoofing is the practice of placing large orders to buy or sell an asset without any intention of executing them. The goal is to create the impression that there is a large supply or demand in the market, so that other traders are encouraged to take positions that benefit the spoofer. Once the price moves in the spoofer's favor, the spoofed order is canceled.
2. Bitcoin (BTC) and Ethereum (ETH) Price Movements:
Il Capo points out that BTC has recovered most of its previous decline, but altcoins are still weak. He interprets this as a sign of preliminary supply, which is an early sign of supply or selling pressure in the market. In this phase, traders or investors who already own an asset start selling it at a higher price, which can create price volatility and open up opportunities for further declines. This phenomenon often occurs at the end of a market cycle when sentiment begins to reverse.
In this analysis, Il Capo predicts that we are on the verge of a shakeout, a phase where prices will experience a sharp drop as part of a bearish market cycle before eventually recovering. He predicts that BTC could reach the $48k-$50k range and ETH could drop to $1.8k-$2k. This drop is part of a corrective cycle in the crypto market.
3. Altcoin Decline:
While BTC may only experience a moderate drop, altcoins are often more prone to greater volatility. Due to their lower liquidity, altcoins tend to experience much sharper drops during bearish phases. Il Capo predicts a 25%-50% drop in many altcoins in the next few days. This suggests that while BTC may recover or stabilize more quickly, altcoins could remain under selling pressure for longer, especially if market sentiment remains negative.
4. Hedge Position and Protection Against Risk:
Il Capo mentioned that he has opened a hedge position, which is a strategy to protect against the risk of a price decline. In the world of crypto trading, a hedge position usually means taking a position in an instrument that will profit if the underlying asset falls. For example, a trader could open a short position on BTC or an altcoin as a hedge against the risk of a major correction in the market.
By hedging, traders can reduce potential losses in their main portfolio if the market experiences a sharp decline. This is a defensive strategy used when there is high uncertainty or high potential risk in the market.
5. Market Cycles and Not Panic:
Il Capo also gave important advice not to panic if this downside scenario occurs. The crypto market moves in cycles, with bullish and bearish phases usually followed by recoveries. He warned that this drop could be part of a âshakeoutâ before the market recovers. Traders and investors are advised to be prepared for this volatility with a well-thought-out strategy, such as a hedge or cash reserve, rather than making emotional decisions driven by fear.
6. General Conclusion:
The main point that Il Capo wants to convey is:
- The market is currently showing signs of manipulation and extreme volatility.
- There is a risk of a sharp decline (shakeout) in the next few days, especially in altcoins, while BTC and ETH may also correct to lower levels.
- He encouraged traders not to panic, but to prepare with the right strategies, such as hedging, to protect themselves from possible losses during this downturn.
Overall, he warned that a significant downturn could occur before the market recovers, and a disciplined and volatility-ready approach is essential in dealing with this scenario.
