Bitcoin (BTC), Like Gold in 2008, Will “Flash Dump” But “Moon Afterwards” Says Expert Crypto Analyst

Omar Faridi
  • Bitcoin (BTC) will “have a bull run” after its value drops significantly due to a “flash dump”, says experienced crypto analyst Willy Woo.
  • Woo had accurately predicted on May 25th that BTC’s price would drop below $6,000.

Willy Woo, an experienced cryptocurrency analyst, had accurately predicted via Twitter in May that Bitcoin (BTC) would drop below the $6,000 mark before it would exhibit any signs of recovery.

Woo also noted in late May that BTC may not sustain the $7,000 price level. The crypto researcher remarked:

I think we are gonna go to $5500-5700 next, I can’t see $7000 holding. Most likely we’ll balance a bit, then we’ll slide through. Long time-frames here, looking into June for rough timing of this to play out at a best guess.

“$5000s Is A Very Strong Support Band”

Woo had further predicted that BTC’s price would probably not dip below $5,000 within the same period. His comments on bitcoin’s price movements 

“I don’t necessarily think we’ll fall through the 5000s… sure it’s a possibility but it doesn’t have to. It’s not a repeat, it’s not Mt Gox and Willybot pushing up price with faked orders, we aren’t detoxing from a scam bubble. Technically $5000s is a very strong support band.”

On June 29th, BTC had fallen to its lowest value we’ve seen this year when it was trading at around $5,800-$5,900, according to data from CryptoCompare. Then about three weeks after hitting its low point, bitcoin’s price surged past $8,000 on July 24th.

Now though, it appears that this was fairly short-term bullish momentum given that BTC is currently trading well below the $8,000 mark at only $7,671.65 at the time of this writing. Notably this significant drop in bitcoin’s price took place in just 48 hours.

“Flash Dump” Ahead For BTC, But “Moon Afterwards”

Given current trends in the crypto market, Woo has now made some more predictions. He stated on August 1st that Bitcoin will likely drop further because of a “flash dump”, but “then moon afterwards, just like Gold in WFC [Wall Street Financial Crisis] 2008. Flight to safety: everything else sells off to USD, then used to unwind leveraged positions, then afterwards havens like Gold and BTC have a bull run.”

Woo also remarked that moving forward, bitcoin’s value would depend on whether institutional investors make substantial investments in the cryptocurrency market. The Forbes contributor said, “Probably also contingent on how many institutional players are in the BTC market over that period. Normal retail HODLers won’t tend to have large leveraged positions to unwind from, apart from maybe mortgages.”

Crypto Trading Tips From Willy Woo

Woo offered some advice on crypto trading as well:

When in bear, stay in USD as a base currency, then short (and long with extra care). When in bull stay in BTC and do vice versa.”

Notably, the veteran crypto investor often uses the NVT signal/ratio to predict bitcoin’s future performance.

The Standard NVT ratio is calculated by dividing Network Valuation by the Transactional Value on a blockchain network, and then “smoothed using a moving average”, according to Woo, who introduced it last year: "The moving average [is then applied] … to the volatile Transactions component only without smoothing the already stable Network Valuation component.”

Israel Bitcoin Association Petitions Banks to Reveal Crypto Policy

Neil Dennis

A number of Israel's bitcoin traders have already filed lawsuits against the country's banks and on Monday traders lodged a formal petition demanding that the financial industry explains its cryptoasset policy.

Israel's banks have barred the country's crypto investors from depositing the returns on their bitcoin and other digital currency investments due to the nation's strict laws on money laundering and the financing of terrorism.

In recent months banks have even blocked investors who are known to trade cryptoassets from opening accounts, according to a report by Israeli business journal Globes.

Central Bank Warning

Israel has seen strong growth in digital currency investment in recent years and in 2014 the Bank of Israel, the nation's central bank, issued a warning - in co-operation with the Tax Authority and several regulatory agencies - about the dangers associated with the use of virtual currency, including fraud and money laundering.

Taking aim directly at financial services providers, the statement said:

As the use of virtual currencies enables their anonymous transfer, in many cases evading the need to use financial institutions that are subject  to an anti-money laundering and terror financing prohibition regime, this is an activity with a high risk co-efficient in terms of money laundering and terror financing. Therefore, financial institutions must take this into account within the framework of their risk management policy.

Injunction

Israel's top legal authority is well aware a problem exists. In February 2018, the Supreme Court issued a temporary injunction prohibiting a bank from blocking activities in an account held by a company that engaged in bitcoin trading.

The bank, however, countered the Supreme Court's injunction, citing the 2014 Bank of Israel warning regarding the risks of bitcoin trade. The bank alleged that activities exposing the bank to such unlawful acts might "harm its reputation and public trust in the bank".

While the injunction stood, it did not affect the bank's right to examine individual activities in the account, nor did it affect the bank's ability to take steps to minimize risks associated with the business activities of the company.

Freedom of Information

The freedom of information petition filed in the Jerusalem District Court on Monday by the Israel Bitcoin Association demands that commercial banks make public their policies on cryptoassets.

Jonathan Klinger, legal adviser to the Bitcoin Association, told Globes:

Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We therefore contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We therefore decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks.

Lawsuits

Last week the Tel Aviv District Court received a petition for approval of a 75 million shekel ($21.3 million) class action suit against Bank Hapoalim that alleges the bank refused a customer seeking to deposit money from the sale of digital currencies.