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A widely followed crypto strategist thinks that a correction in one safe-haven asset will likely trigger risk-on behavior that could benefit altcoins.
Analyst Michaël van de Poppe tells his 791,800 followers on the social media platform X that he’s keeping a close watch on gold’s price action, noting that the precious metal’s chart is the “most important chart to watch” this week.
According to the trader, gold appears to have printed a bearish lower high setup on the six-hour chart, suggesting that the precious metal could fall to as low as $3,200 in the near term.
“As long as Gold stays sub-$3,365, we’re likely going to see a sharp fall in the coming one to two weeks of anything between 4-10%, resulting into a sudden macroeconomic shift.”
Source: Michaël van de Poppe/X
Van de Poppe believes that falling gold prices will be beneficial for altcoins, as it suggests an increased appetite for risk among investors.
“At the end of [last] week, a sudden [gold] correction took place, which might result in the confirmation of a short-term downtrend.
This is vital, as that would attract more investors towards Altcoins.
Why?
It would enable more investors to be jumping into risk-on assets, when gold implies that it continues to fall.
This means –> money/liquidity flows from risk-off assets towards risk-on assets, and the best asset class remains to be crypto.”
But the trader warns that altcoins will likely see lower levels if gold shatters $3,365.
“If it does break above that crucial level, the theory is invalidated, and we’re likely open for printing new highs, which then means that we’re printing new lows on altcoins.
For me, this is crucial, as a correction in Gold and rally in the CNH (offshore Chinese renminbi) implies that we’re going to be seeing more interest flowing into crypto after that.”
At time of writing, gold is trading for $3,324, up more than 60% in the last 18 months.
