AltcoinGordon, a respected voice in the cryptocurrency community, recently criticized common mistakes in crypto trading. In a tweet on February 4, 2025, he highlighted how many traders fall into the trap of being overly optimistic when prices are high and overly pessimistic when prices are low. According to him, poor timing is one of the main reasons traders fail to turn profits.
On February 3, 2025, Bitcoin (BTC) hit a local high of $52,130, and Ethereum (ETH) reached $3,120. These surges came after a significant rise in prices—BTC up 7.2% in 24 hours and ETH up 6.8%. At the same time, trading volumes were at their peak, with BTC’s 24-hour volume reaching $34.5 billion and ETH’s volume at $18.9 billion.
The market sentiment was positive, driven by news of clearer regulations in key markets. However, AltcoinGordon warned traders not to let the market’s excitement cloud their judgment. He cautioned that, when prices hit high points, it may not always be the best time to buy.
The sharp increase in prices of both Bitcoin and Ethereum raised concerns over the market’s potential to be overbought. The Relative Strength Index (RSI), a common measure of market conditions, indicated this on February 3, 2025. Bitcoin’s RSI reached 78.5, and Ethereum’s RSI was at 76.2, signaling that both assets might be overbought and could see a price correction.
Traders following Gordon’s advice could look to take profits at these highs before any potential downturn. The significant increase in trading volumes also suggested high liquidity, which makes it easier to enter and exit positions. On February 3, 2025, the BTC/USD trading pair saw $22.3 billion in volume, while ETH/USD had $14.1 billion in volume.
Several technical signals point to the possibility of a market correction. The Moving Average Convergence Divergence (MACD) for Bitcoin showed a bearish divergence, with the MACD line crossing below the signal line. This suggested that Bitcoin might experience downward momentum. Ethereum displayed a similar signal with its MACD also indicating a bearish trend.
Moreover, the Bollinger Bands for both Bitcoin and Ethereum were widening. This is a sign of increased volatility. On February 3, 2025, the upper band for Bitcoin was at $53,400, and for Ethereum, it was at $3,200. The widening bands are often a sign that the market could be primed for a sudden shift.
On a related note, February 2, 2025, saw a major breakthrough in machine learning technology. This caused a surge in the price of AI-related tokens, including SingularityNET (AGIX), which rose by 5.5% on February 3, 2025. The trading volume for AGIX soared to $450 million, indicating strong market interest in AI-driven tokens.
As AI technologies gain traction, there are increasing trading opportunities at the intersection of AI and cryptocurrency. The positive sentiment around AI is contributing to market movements and driving up the prices of related tokens. The rise of AI is now having a noticeable impact on the broader cryptocurrency market, including major players like Bitcoin and Ethereum.
The crypto market is experiencing a period of high volatility. While the excitement around Bitcoin and Ethereum’s price surge is tempting, AltcoinGordon’s cautionary advice urges traders to be careful. The market’s overbought conditions, signaled by high RSI values and bearish MACD divergences, suggest a potential downturn. Traders need to be aware of these signs and adjust their strategies accordingly. Additionally, the increasing interest in AI-related tokens is opening up new trading possibilities in the crypto space.
