Bitcoin’s Powell Pump Could Be Crypto Market Shakeout Claims Pseudonymous Trader

This morning, just as the Fed’s Jerome Powell began his speech, Bitcoin started pumping in a fast-moving short squeeze, driven by inflation narrative.

However, the move just as quickly reversed, plummeting back down to lower than where the pump first began. Traders are calling the move a well-time shakeout. But what comes next for the cryptocurrency?

Bitcoin Blasts $300 In An Hour, Tanks $300 Moments Later

Investors and traders were watching markets like a hawk this morning, expecting some type of movement either way in response to Federal Reserve Chairman Jerome Powell’s speech.

The Fed pledged to keep the inflation rate as close to 2% as possible, but the lack of confidence in recent monetary policy has encouraged investors of all sizes to explore Bitcoin.

More and more small-time investors are buying up the asset in anticipation of higher prices, while institutions and corporations are now considering the cryptocurrency as an economic hedge and treasury reserve asset.

Related Reading | Bitcoin Crossroads: Indicator Signals Short-Term Top, But Final Bullish Impulse Is Possible

The safe haven and hyperinflation narratives surrounding Bitcoin had buyers quick on the trigger this morning during Powell’s speech. But those buyers quickly were met with strong resistance, and the entire pump was erased just minutes later.

Was this a rejection, normal price action, or was this a well-designed shakeout before a much larger move?

BTCUSD 15M Post Powell Speech Pump & Dump Shakeout  | Source: TradingView

Was Today’s Powell Pump An Orchestrated Crypto Market Shakeout?

As big as Bitcoin is compared to other crypto assets, it is still illiquid compared to gold or stocks in scope. It takes much less money to move or manipulate crypto markets, giving whales an edge when it comes to trading Bitcoin.

Markets can be unpredictable, but sometimes even the unpredictable gives signals before a sudden move. For example, a cryptocurrency trader recently outlined what a crypto market shakeout looked like, using a real-life example from a recent pump in Basic Attention Token.

Related Reading | “Upside Reversal” In Bitcoin Possible, Here’s What To Watch For

Before the pump took place, trading became erratic in an attempt to confuse traders and send them to the sidelines. Then, just as price action cooled off, prices plunge, only to quickly reverse and pump an enormous amount.

Today’s shakeout, if it was one, could be the same situation yet in reverse. After strange price action, Bitcoin pumped on Powell’s speech but quickly was rejected back down. If Bitcoin tanks from here, the shakeout will be confirmed.

btcusd bitcoin darth maul

BTCUSD 4H Post Powell Speech Darth Maul  | Source: TradingView

The pump would have been designed solely to shake short traders out of position before the real move down takes place, claims one crypto trader.

However, this all could be part of the plan. Today’s move left a Darth Maul candle on 4-hour timeframes. These candles often appear as shakeouts ahead of a bigger move. BTCUSD falling after several days has resulted in a TD 9 buy setup on the TD Sequential indicator.

This could indicate that the shakeout was not just to shake out shorts, but shake out traders on both sides of the trade.

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Source: Newsbtc

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