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.”

Current Bitcoin Pullback is Healthy, Says Tom Lee

Neil Dennis

Bitcoin enthusiasts and critics alike have responded strongly on social media to a Tweet sent this week by Fundstrat co-founder Thomas Lee, who said the current bitcoin pullback is healthy.

"It's healthy to see bitcoin pullback here," said the managing partner and head of research at Fundstrat Global Advisory. He added:

As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in bitcoin has not been accompanied by massive hype.

According to Google Trends analytic service, search for bitcoin in the US have fallen by around 45% since their end of June peak. But this has not stopped Lee, and many others, making some very lofty price predictions.

Optimistic Price Predictions

Lee has become one of bitcoin's biggest advocates and his price predictions are among the loftier. Not on the scale of cyber-security provider John McAfee, who believes bitcoin will reach $1 million in 2020, but Lee thinks bitcoin's $20,000 high will be taken out and a run up to $40,000 is possible this year.

But the critics are never far away: Peter Schiff, chief executive of Euro Pacific Capital - an arch gold bug who has likened interest in bitcoin to "tulip mania", replied to Lee's Tweet, saying "every sign is bullish according to you".

He added: "Fewer searches shows that new buyers are scarce.  Existing speculators pressing their bets, many using leverage, have pushed prices up.  But without new buyers prices will collapse."

Schiff's comments prompted several of Lee's followers to jump to his defence, with one of them Tweeting that "trolls like you makes every bull run so much more enjoyable".

Trump Effect

US president Donald Trump has also been weighing in on bitcoin recently, slamming the cryptocurreny market as "highly volatile" and values "based on thin air". While the crpto-community thanked him for the free publicity, prices have been weaker ever since his July 11 Twitter outburst.

Bitcoin's price has fallen from just above $12,100 on July 11 to around the $10,400 on Tuesday June 16.

Indeed, as Lee stated, pullbacks in asset prices can be healthy. They may only be a sign of some traders taking profits before buying back in, but whatever the cause, a lower price during what has - very obviously - been a strong bull run can be an alluring buy signal to tempt fresh investment into the market.