Bitcoin bounces from 3-week lows — why 'bad narratives' have one trader staying neutral

Bitcoin is bouncing back from its recent lows.

The cryptocurrency climbed nearly 9% on Wednesday after hitting a three-week bottom Tuesday, fueled in part by El Salvador becoming the first country to accept bitcoin as legal tender. Interactive Brokers also said Wednesday that it would launch crypto trading on its popular platform by the end of the summer.

But significant obstacles remain, long-term bitcoin bull Todd Gordon told CNBC's "Trading Nation" on Wednesday.

"We're recently short bitcoin. We've covered it," said the TradingAnalysis.com founder, adding that he's still a long-term holder. "There's a lot of sort of bad things, bad narratives weighing against it."

With investors still reluctant to embrace it as a store of value, competition from ethereum increasing, the governments of China, Turkey and India cracking down, and Tesla CEO Elon Musk raising environmental concerns, bitcoin's headwinds aren't exactly few and far between, Gordon said.

"If we look at the technicals, you saw a 53% drop in 2019, a 62% drop in '20 and we just saw a 53% drop. So, we could go a little bit lower, but right now, I think we're neutral," Gordon said.

He suggested watching some key inflation data — the consumer price index (CPI), set to be released Thursday — for hints on where bitcoin could head next.

"If that CPI number is not hot, watch bitcoin's reaction and that'll start to tell you maybe it's an inflation hedge," he said.

One fellow bitcoin bull wasn't as worried for the near term.

"I'm still bullish and still buying," Delano Saporu, founder and CEO of New Street Advisors Group, said in the same "Trading Nation" interview.

With El Salvador, "you're seeing a country that's going to possibly be able to level the playing field for a lot of folks," Saporu said.

"They mentioned 70% of people in the country aren't able to have financial services readily available," he said. "That's one of the use cases that a lot of people are bullish on when it comes to cryptocurrencies in general, so, we're definitely still buying and definitely still bullish."

Disclosure: Gordon owns bitcoin and shares of the Grayscale Bitcoin Trust (GBTC). Saporu and New Street Advisors Group own bitcoin.

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