Welcome Vaultorians, to your weekly price analysis on bitcoin and gold!
BTC/USD – Bitcoin eyes $4,000
After regaining some of the losses of last week, bitcoin is now trading at $3,867.
A sudden move down on Monday was met with strong support near the yearly open at $3,700,
and since then the price has been consolidating in a tight range under resistance at the $3,890 region.
Sitting just below the yearly open, and acting as additional support, is the 100 Day Moving Average. This adds further confluence to the support level, suggesting that a break through this region could be expected to yield a significant move down to further support at the $3,550 region and $3,350 region.
On the bullish side, total trading volume across all crypto markets has been expanding over the past few weeks — a pattern that typically precedes large bullish moves.
Zooming in to the hourly chart reinforces this bullish picture, revealing an ascending triangle pattern that is pushing against resistance at the $3,885 level.
If this pattern follows through, and the breakout makes it through resistance at the $3,970 region, we could expect bitcoin to revisit the recent highs around $4,100. Beyond this point, the next significant resistance lies at around $5,500.
XAU/USD – Gold finds support at $1,280
A bearish week has left gold trading at $1,293.
A sharp rise in US treasury yields late last week, catalysed by suggestions that US-China trade talks could be resolved, weighed heavily on the yellow metal in the early part of this week, and pushing up the dollar (as measured by the DXY), which has now rallied up to highs of 97.5.
On Thursday, the ECB slashed economic growth forecasts, helping gold to stay strong above support at the $1,280 level, with a series of wicks on the daily candles extending down, showing how buyers have stepped in to prevent the price from closing below this key support.
If this level manages to hold, then we have a good chance of clawing back up to the highs. But, a close below could set a larger move in motion down towards the $1,270 and $1,250 regions.
In the short-term, much could depend on the release of Non-Farm Payrolls data in US today, with weak data potentially pushing the dollar down and catalysing a rally in gold.
In the longer term, China-US trade talks and Brexit negotiations are also likely to have an influence on the price of gold, with negative outcomes potentially pushing the price back above the $1,300 level and towards 2019 highs.
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.