“Long term, I love cryptocurrency, I love Bitcoin. But the charts — and I’m a technician — are just not showing that,” Gareth Soloway, president and CFO of InTheMoneyStocks.com told Yahoo Finance Live.
“Bitcoin for me, has a nasty head-and-shoulders pattern on it. Believe or not, in early 2022, or early 2023, you could see a move down sub-$20,000 in Bitcoin,” he added.
“We’ve seen Bitcoin hovering between $52,000 and $46,000 for the last month. And it keeps hitting on that $46,000 level. So on a technical basis, if you break below that $46,000…you are going to see downside to about $42,000, the low from early November.”
The digital coin broke a key support level on Wednesday following the latest FOMC minutes which highlighted a more hawkish discussion among Fed officials than what markets had anticipated.
Soloway highlights another pattern. While the Dow and S&P 500 (^GSPC) saw a Santa Claus rally coming into the new year, Bitcoin has continued to falter in the last month. It’s now more than 35% off its all time high levels from November.
“There’s some little disconnect with cryptocurrency as a riskier asset, and I do worry that, it, including Ethereum (ETH-USD) will start to see further downside,” said Soloway.
The technician predicts Gold (GC=F) will outperform the S&P 500 and Bitcoin for this year. However long term, he still believes Bitcoin will be the place to be.
“You look 5 years out, Bitcoin is easily at $100,000, maybe even $250,000. But for me, I’m looking at the leverage in the system including the stock market,” said Soloway.
