Bitcoin trader warns risk 'is peaking' in crypto cycle, calls for caution

A Bitcoin analyst has warned crypto market participants to tread carefully in the coming months, with more profit-taking expected in the near term.

“Risk is peaking for the first time in this cycle, and there’s a ton of profit in coins that have been selling and plenty more profit-taking to go before we are properly reset,” Bitcoin (BTC) analyst Willy Woo said in a Jan. 10 X post.

Willy Woo advises a ‘cautious approach’ for the coming months

He said that although Bitcoin sentiment “seems uber bullish,” market participants should opt for a more “cautious approach” in the coming months. He highlighted his Bitcoin local risk model, which indicates risk levels not seen since January 2023.

Willy Woo’s Bitcoin short term models. Source: Willy Woo

The overall market still has a “Greed” appetite, according to the Fear and Greed Index, which measures market sentiment for Bitcoin and other cryptocurrencies.

The Index currently reads a “Greed” score of 69, up 19 points from its “Neutral score” of 50 on Jan. 10.

After Bitcoin retraced from the $100,000 psychological level on Jan. 8, it has remained below the level ever since.

Bitcoin is down 3.92% over the past seven days. Source: CoinMarketCap

Bitcoin is trading at $94,120, down 3.92% over the past seven days, according to CoinMarketCap data.

Other traders say ‘high probability of reversal’

Cointelegraph recently reported that the United States Federal Reserve’s December nonfarm payrolls (NFP) data beat expectations. Showing a stronger labor market, NFP pressured risk assets across the board and was joined by lower-than-anticipated unemployment figures. 

Related: ‘Trump dump’ risks pulling Bitcoin price down to $88K

However, not all analysts are convinced that the drop in Bitcoin’s price will last long.

Pseudonymous crypto trader Rekt Capital said in a Jan. 10 X post that Bitcoin’s 15% pullback from its brief all-time high of $108,000 on Dec. 17 aligns with patterns seen in previous cycles.

“The timing of this retrace is in line with historical tendencies,” Rekt said.

“As a result, it has a high probability of reversal,” Rekt added.

Meanwhile, Jan3 CEO Samson Mow said in a Jan. 10 X post to his 327,000 followers, “If you understand the macro landscape, you understand that all dips are fake now.”

“They are just manufactured to lower the Bitcoin price for the big players,” Mow said.

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