Weekly Price Analysis #19 – Week 36

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BTC/USD – The Return of the Bears

The steady climb in the price of the last couple of weeks has now reversed, and bitcoin is currently consolidating around $6,504.

On Monday and Tuesday, bitcoin was looking reasonably bullish, enjoying what was the first steady rise for several months. Several indicators, including the MacD, were indicating that a reversal of the long-term trend was in play.

But on Wednesday, after failing to decisively break crucial resistance at $7,400, bitcoin went cliff diving, falling five percent in roughly three hours. This violent sell-off, accompanied by high levels of volume, suggested the bears had been lurking in the background, waiting for the optimal time to strike.

This confirmed the thesis of bearish commenters on Twitter, many of whom had been calling for a drop since the parabolic rise in BTC/USD shorts last weekend. These shorts are now in healthy profit, and the market sentiment is again looking very bearish.

Should price manage to successfully close on the daily chart above resistance at $6,600, then we might see further upside, but current price action suggests a test of the $6,300 region would be more likely. If this region is broken, then we might see a deeper floor put into this bear market.


XAU/USD – The Climb Continues

The last week has been positive for gold, which is currently trading at $1,200. The yellow metal has been under pressure for most of this year from a strong dollar, with global trade tensions and several emergency currency crises driving investors to the greenback instead of the more traditional safe-haven asset.

Mid-August saw the end of this downward pressure, and as a relief rally started, the number of short positions started to drop. The trend has continued this week, and weakness in the U.S. dollar has stabilized selling pressure in gold, allowing the yellow metal to sustain momentum from the previous weeks’ climb.

This positive sentiment has provoked a spate of bullion buying, especially across Asia. in India, gold imports more than doubled in August, reaching levels not seen since 2017 as low prices and the prospect of a reversal prompted manufacturers and goldbugs to replenish their vaults.

A weak Yuan, however, has prevented any real upwards breakout of gold, and the future still looks uncertain. Markets will be keenly awaiting the release of a U.S. employment report today which will give clues on the pace of interest rate increases by the Fed and signal potential future price direction.

Should the upswing continue, resistance can be found at the $1,208 region, which if broken would put the next stop at $1,219.

To the downside, strong support remains at $1,185, and yearly lows at $1,173.


Disclaimer: This information is not financial advice, and should not be treated as a recommendation to buy or sell. It is to be used for educational purposes only.

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