Tone Vays Warns Bitcoin Traders Of A ‘Very, Very Rare’ Bearish Signal
According to a popular trader, Tone Vays, Bitcoin traders should be aware of a signal, that he says is a warning for signs of weakness.
In a recent video, Vays shares with his 114K subscribers on YouTube that while Bitcoin continues slowly move higher, lower timeframe indicators are currently flagging bearish signals.
“But I don’t like the oscillators on the four-hour timeframe, and it’s coming into an MRI [momentum reversal indicator] top. So you really want to be careful here. You want to be a little bit cautious… So this is of concern. This is not normal. You don’t normally get a bearish CMF as the price is breaking out to a new high. That is very, very rare. That’s what happens when your volume is declining so badly.”
Vays is referring to the Chaikin money flow (CMF) indicator, which according to Fidelity is:
“[..] a volume-weighted average of accumulation and distribution over a specified period. The standard CMF period is 21 days. The principle behind the Chaikin Money Flow is the nearer the closing price is to the high, the more accumulation has taken place. Conversely, the nearer the closing price is to the low, the more distribution has taken place. If the price action consistently closes above the bar’s midpoint on increasing volume, the Chaikin Money Flow will be positive. Conversely, if the price action consistently closes below the bar’s midpoint on increasing volume, the Chaikin Money Flow will be a negative value.”
Tone Vays’ chart shows that the CMF is hovering below the zero line, which indicates weakness in the market.
Regarding daily timeframe, the trader points out that BTC’s volume is going down in general.
“You can see the volume is just going down in general since the big spike on May 19th… This is just a general trend. Every peak is lower. That’s not great. It’s not really what you want to see.”
Vays predicts that BTC in short term will pull back before continuing its ascent to new all-time highs.
“I’m expecting another buy the dip after we get close to the all-time high. And then I believe, there will be a pullback to the low $50,000 area. Now is that going to happen? I have no idea. But we are going up quite a bit. I still think there’s a little bit more room, but then I think there will be a pullback before the big rise at the end of the year.”
A fellow trader and analyst Credible Crypto predicted something similar for Bitcoin in the short term. He sees the next support to be at $52K level and then at $48K before the bullish sentiment will again continue.
“Still expecting a move down to 52k. Expect a bullish reaction there- probably a dead cat/lower high- then a move down to 48k where I think bulls have a serious chance of turning it around. A weekly close above our bearish supply zone and I may change my tune.”
Still expecting a move down to 52k. Expect a bullish reaction there- probably a dead cat/lower high- then a move down to 48k where I think bulls have a serious chance of turning it around. A weekly close above our bearish supply zone and I may change my tune. $BTChttps://t.co/tcd0TxasSj
