Trader Who Called Last Year's Crypto Crash Covers Bearish Altcoin Bets

• Pseudonymous Trader il Capo Of Crypto, known for predicting last year’s market crash, has squared off loss-making bearish bets in alternative cryptocurrencies.
• Capo has flipped from bearish to neutral, with bitcoin topping key resistance at $31,000.
• Capo's primary bearish case of bitcoin sliding to $12,000 is not yet fully invalidated.

Well-known cryptocurrency trader il Capo Of Crypto has covered bearish bets against several alternative cryptocurrencies as bitcoin (BTC) rallied to $35,000 for the first time since May 2022.

“This breakout is not good for the main bearish scenario. I didn’t expect the $31K resistance level to break that easily,” Capo said in a Telegram broadcast to his 614,675 subscribers. “I’m out of my shorts that were in a loss (AAVE, SOL, CRO and TRX) [and] keeping the ones in profit (BNB, MATIC and WAVES) open until more information is available.”

Capo, who has been trading digital assets since 2017 and stocks for over six years, predicted last year’s crypto carnage. Capo retained his bearish outlook in June, calling a bitcoin slide to $12,000 and ether to $500-$700 even though, by then, BTC was up 50% for the year.

"There were (and are) a lot of reasons to be bearish. Every time I checked the charts, I saw that, and that's what I communicated to my followers," Capo told CoinDesk.

The persistent bearish bias drew the ire of the crypto community on social media platform X, with some now looking at Capo’s latest decision to close bearish bets as a contrary indicator.

"Capo capitulating. Hope you enjoyed the pump, It is over,” one user said on X, while another said it's a “top signal."

Capo capitulating,
Hope you enjoyed the pump,
It is over.

— Tree of Alpha (@Tree_of_Alpha) October 24, 2023

Per Capo, the primary bearish scenario of BTC falling to $12,000 is not fully invalidated yet but has become less likely with prices above $31,000.

In other words, two scenarios look plausible. Bitcoin may revisit the former resistance-turned-support at $31,000 before posting a more substantial rally or drop below the said level, confirming a "fake breakout" and restoring the bearish bias.

"No, I am not bullish, just neutral. I'm not buying yet nor closing the shorts that are in profit, just the losing positions to derisk a bit. If the price goes back below the support zone, I will start adding shorts again," Capo told CoinDesk. "the macro looks very bad, with a recession being likely, two big wars... and Binance could face big problems, that's why I'm still big short BNB."

The macro factors, however, have recently fallen to the back burner, thanks to the spot bitcoin ETF narrative. This week, the market has flashed signs of FOMO (fear of missing out) or bull frenzy, with bitcoin moving rapidly on the supposed appearance of BlackRock’s proposed ETF listing on the Depository Trust & Clearing Corp.’s website.