Bitcoin is still firmly in bullish territory despite its “huge drop” of more than $1,200 this weekend, one of the industry’s best-known traders says.
In the latest edition of his Trading Bitcoin livestream, Tone Vays said that there was no need to worry after BTC/USD crashed from more than $12,000 to less than $10,900 in 20 minutes.
“I still maintain the view that last week was a bullish candle,” he summarized on August 3.
Vays on Bitcoin price: “We are still bullish”
Coming the day prior, the drop dealt a significant blow to Bitcoin’s weekly price candle, with spot price subsequently recovering to above $11,000 by Monday.
Momentum had built in the preceding days, as BTC/USD took out resistance at $10,500 and then $11,400 to briefly hit highs of $12,080. This proved too much to sustain for the weekend market, but the roughly 15% losses which ensued did not disturb Vays.
“I believe we are still bullish; we remained inside this bullish pennant and I’m still bullish on the market here,” he continued while analyzing the BTC/USD daily chart.
“We got the pullback that I wanted.”
Nonetheless, Vays would not be drawn on whether the retreat to the $10,000 range was sufficient to put in a new price floor before further upward action ensued.
“Was that enough of a pullback? That’s a tough one for me,” he said.
Others continue to anticipate a correction for Bitcoin based on the speed with which $12,000 reappeared. For fellow trader Michaël van de Poppe at the Amsterdam Stock Exchange, potential downside nonetheless represents a rare entry level rather than something to fear as an investor.
“The next correction could be the life-changing ‘buy the dip’ opportunity,” he told Twitter followers.
Previously, Modern Consensus reported, comparisons to previous Bitcoin bull runs showed that this year is less of a headache for analysts — pullbacks occurred, but these were less intense or sustained than before.
At press time on Tuesday, Bitcoin had retreated to around $11,100, having circled $11,300 over the past 24 hours to sustain support above $11,000.
Monthly chart sounds warning for gold
The strength comes as the status quo in macro markets continues to favor safe havens, with gold hitting new all-time highs against the US dollar of $1,975. Frontrunning Bitcoin’s own gains, XAU/USD is nonetheless ripe for disruption or even a crash, Vays warned.
Highlighting a monthly chart warning, he forecast that this month or next, gold’s bull run would be coming to an end.
“So gold might be topping,” he concluded.
The precious metal’s performance has surprised even long-term market participants. Just a week ago, Citigroup analysts placed the odds of the remaining ground to $2,000 being clinched by the end of 2020 at just 30%.
Bitcoin’s correlation to gold has meanwhile increased, while stock market fragility has impacted the cryptocurrency’s performance less and less over the past month. Historical correlation between BTC and the S&P 500, for example, had been as high as 95%.