Bitcoin Is Reversing its Downtrend From A 2017 Peak in An Action HODLers Like to See
Bitcoin is enjoying the green ever since it broke through $10,000 over the weekend. The leading digital currency had already started moving last week, but this week, it gained momentum and is currently trading above $11,000.
Up over 16% in the past five days, it is Bitcoin’s turn to shine.
Ari Wald, head of technical analysis at Oppenheimer, an investment banking service provider, recently in an interview with CNBC while talking about gold. According to him, Gold is looking good after its run-up said, “it’s worthwhile to highlight bitcoin instead, which isn’t as extended.”
Wald notes that bitcoin’s recent breakout is setting up more gains ahead. He said:
“Bitcoin is reversing its downtrend dating back to its 2017 peak. If you are a long-term holder, this is the type of action you’d like to see.”
The flagship cryptocurrency is up 190% from March low but still about 80% away from its all-time high of $20,000 hit in December 2017.
Michael Binger, president of Gradient Investments, however, still prefers yellow metal over digital gold.
“Between the two, I would really lean on the gold side here. When you think about it, it is really a Goldilocks environment for gold investors right now. I mean, you have a weak U.S. dollar, you have negative real interest rates. All of this is based on the prospect of rising inflation.”
Although Binger agrees that bitcoin is a momentum play, he says it is not a “valid currency yet.”
Goldman Goes From no to Keep Buying it
In comparison to gold’s 28% run-up in 2020 so far to hit new peaks, bitcoin has surged over 50% YTD.
Bullion is certainly on investors’ radar, especially after it made new highs. Even Goldman Sachs is recommending investors to keep buying gold, raising its 12-month forecast for gold to $2,300 an ounce.
On Wednesday, Goldman Sachs issued a bold warning that the dollar is in danger of losing its status of the world’s reserve currency amidst the fear of currency “debasement,” inflation, and real interest rates at all-time lows.
This call to buy gold came two months after the investment bank “pissed on bitcoin and gold” back in May, stating, “we do not recommend gold or bitcoin on a strategic or tactical basis for clients’ investment portfolios.”
So, it won't’ be far-fetched if Goldman comes running back to bitcoin as well in the not so distant future.
“We’ve been recommending gold as a way to play the expansion of the [Federal Reserve’s] balance sheet. It’s actually the high momentum commodity, it ranks highest above all commodities out there in terms of momentum,” Wald said on CNBC's “Trading Nation,” adding they recommend “sticking” with the precious metal.