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Veteran trader Tone Vays is putting Bitcoin traders on notice as he believes the leading cryptocurrency is flashing signs of weakness.
In a new strategy session, Vays tells his 114,000 YouTube subscribers that while Bitcoin continues to inch higher, lower timeframe indicators are now showing 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, a technical oscillator that tracks volume to identify periods of accumulation and profit-taking. According to the trader’s chart, the CMF is hovering below the zero line, indicating weakness in the market.
Looking at the daily timeframe, Vays highlights that BTC’s volume is “tapering” amid Bitcoin’s ascent.
“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.”
In the short term, Vays predicts BTC to 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.”