Yes, bitcoin has stabilized today after yesterday’s selloff, but the digital currency “is not acting well,” says Louis Navallier, chairman of investment firm Navallier & Associates.
This year’s price chart, he pointed out, seems to draw not one but two “head and shoulders” patterns. That happens when an asset has three peaks, with the middle one higher than the first and third. For chartists, it’s a sign that an asset is about to go into reverse.
Bitcoin’s chart has one piled on top of the other. That’s ominous in his eyes. It suggests that not only is bitcoin’s selloff not over, but it could ultimately pull the crypto to less than $10,000, he said.
That sounds severe, but shouldn’t be surprising. Bitcoin’s trading history includes a few 80% selloffs.
Navallier said he’d spoken with a number of bitcoin buyers, and their reasons for buying usually boiled down to the fact that the price was going up. “If they bought it just because it was going up, they are also likely to sell it because it is going down,” he said.