In the wake of the emergency Federal Reserve Rate cut, a famous gold analyst Peter Shiff is telling investors to sell cryptocurrency. According to Shiff, the Fed’s panic rate cut helped buoy assets like gold which are considered an alternative currency to the fiat currencies. With bitcoin prices barely moving on the Fed move, Shiff is telling investors to sell bitcoin.
While bitcoin has recaptured a key level above 8,500 Shiff is telling investors to look out below. According to the Coin Telegraph Schiff said that BTC/USD “won’t go up” and that therefore selling pressure would ensue. Shiff said that bitcoin cannot rally and with “an emergency 50 basis point rate cut, plus all of the recent stock, bond, currency, and gold market volatility, under what circumstances will it rally?” He reasons that if bitcoin or other cryptocurrencies cannot rally on the news related to the coronavirus, when will it rally? Shiff continues to be a cryptocurrency bear and at the same time believes gold prices will move a lot higher. He also sees crypto trading liquidity failing to reach the levels of gold.
The technicals for bitcoin the most liquid of the cryptocurrencies are mixed. The 10-day moving average recently crossed below the 50-day moving average which means that a short-term down trend is now in place. A moving average is the average of a specific number of days. For example, the 10-day moving average is the average of the last 10-days. On day 11, the first day is dropped from the average calculation. Short term resistance on bitcoin is seen near the 10-day moving average near 8,925.
Short term momentum on bitcoin prices has turned positive. The fast stochastic generated a crossover buy signal as the stochastic crossed above the signal line. This reflects short term accelerating positive momentum. The current reading on the fast stochastic is 22, just above the oversold trigger level of 20 which generally foreshadows a correction.
Medium-term negative momentum is beginning to decelerate. The MACD (moving average convergence divergence) histogram, is slowly moving higher with an upward sloping trajectory and headed for a crossover buy signal. This occurs when the MACD histogram crosses above the zero-index level. The MACD line shows that momentum remains negative but the trajectory of the MACD line is moving higher which reflects consolidation. The MACD line is headed for a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
For those who see cryptocurrency as an alternative asset to fiat currencies such as the dollar, it appears odd that cryptocurrency values are not increasing with the spread of the coronavirus. The Fed surprised the market with an emergency interest rate cut which put downward pressure on the US dollar, buoyed gold prices, but failed to put a bid under cryptocurrency values.
The technicals show that bitcoin the most liquid cryptocurrency could be bottoming, while momentum is turning positive to neutral. Bitcoin prices will need to close above the 10,500 level for investors to be convinced that a substantial rally in cryptocurrency could be underway. Analysts like Peter Shiff will continue to favor gold until bitcoin begins to substantially rally.