Weekly Price Analysis #43 – Week 9 – 2019

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Welcome Vaultorians, to another weekly price analysis!

February has ended on a positive note for bitcoin, but gold has managed to give all of its recent gains back to the market.

BTC/USD – Bitcoin Breaks Six Month Losing Streak

Bitcoin is now trading just above $3,800 — a price region that has acted as strong support over the past week.

After pushing through resistance at the $4,100 level last Friday, bitcoin promptly turned around and fell back to find support at the top of the downward trend-line of the symmetrical triangle pattern seen on the daily chart.

Although quite dramatic, this correction has left the bullish market structure intact, and further dips from this level have been bought up very quickly. This is shown by long wicks on the daily chart — particularly on Tuesday, Wednesday and Thursday — that show how buyers have stepped in to prevent the price from closing below the $3,790 level.

Zooming out to the monthly chart gives another reason to be bullish — with bitcoin printing its first green monthly candle after six steady months of bleeding. Moreover, this green candle qualifies as a bullish engulfing pattern, which is a trend reversal pattern that normally occurs at the end of a downtrend.

For this bullish setup to be confirmed, bitcoin needs to stay above March’s opening level at $3,791, and ideally move past the key resistance at $4,190. The longer bitcoin takes to do this, the more likely it is that any recent bullish momentum we have managed to keep will fade away.

If we do move lower, then support is likely to be found at the bottom of the range at the $3,700 region, and then around the $3,550 region.

XAU/USD – Gold Gives Back its Gains

After a bearish week, gold is now trading at $1,309 — a drop of around one percent since the last weekly update.

Although some consolidation could have been expected before facing resistance at $1,350 for the second time, the price has now broken conclusively through the $1,320 level, suggesting the move down could be more than just a correction.

This comes despite significant geopolitical turmoil that could have helped boost safe haven demand for the metal. India and Pakistan have exchanged blows this week, and the U.S.-North Korea nuclear summit in Vietnam ended with uncertainty as leader Kim Jong Un disagreed with President Trump’s demands for denuclearisation.

Strong economic data however, seems to be sending gold into a minor tailspin — and despite a brief bullish interlude on Thursday morning, the price has continued to fall — likely spurred by Thursday’s GDP estimate from the US commerce department, which showed better than expected overall growth and a rise in consumer spending. This strong economic data is good for the dollar, and has helped to push gold down.

Looking ahead, gold now sits just above the $1,304 – $1,306 area, which should act as strong support after significant trading in this area in early February. Should the price bounce here, it is likely to face resistance at the $1,312 region and then around the $1,321 region.

If we keep moving lower, then further support could be found around the $1,295 region, and then around $1,280.

Disclaimer: This content is for educational purposes only and does not constitute financial advice. It is very important to do your own analysis before making any investment.

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