Bitcoin/Gold Ratio Shows Downside May Be Sight
CNBC contributor and founder of “The Bear Trap Report” Lawrence McDonald notes that one bitcoin is now worth 20 ounces of bullion, a significant drop from the peak of 37 ounces recorded in August.
The XBT vs XAU ratio, from 38x now to almost 20x, is not yet near the buy zone. Sell near 40x Buy near 15x, it’s done.#bitcoin #Sleep pic.twitter.com/BFiHZcQMNJ
— Lawrence McDonald (@Convertbond) 21 January 2022
McDonald’s believes the flagship cryptocurrency will be in the buying zone when the XBT/XAU ratio reaches 15 oz.
As reported by U.Today, the Relative Strength Indicator (RSI) on the weekly chart of Bitcoin is also flashing oversold conditions, now falling below 40.
Earlier today, bitcoin fell to the $37,000 level earlier today, adding to its bearish streak.
Galaxy Digital CEO Mike Novogratz recently tweeted that cryptocurrencies will remain under pressure as they continue to trade alongside the US stock market. The correlation between Nasdaq and bitcoin recently reached another all-time high.
Trader Josh Olszewicz tweeted that bitcoin has entered the weekly Ichimoku cloud for the first time since the start of the pandemic, which he considers a troubling sign for bulls.
Two troubling things here for the bulls
1) Entering the weekly cloud for the first time since the pandemic
2) Active H&S potentially playing out, S1 yearly pivot @ $26k. measure of pic.twitter.com/1TQevhB3G8
— Josh Olszewicz (@CarpeNoctom) 21 January 2022
Fairlead Strategies Katie Stockton recently noted that $37,361 will act as a key support level for bitcoin. If the leading cryptocurrency falls below the above price point, it is likely to continue falling back towards the $30,000 level.