Welcome all, to another weekly update on Bitcoin and Gold!
BTC/USD – The Snake Coils—Which Way Will it Strike?
As Bitcoin edges further into the confines of the Symmetrical Triangle, traders are becoming increasingly tense—a breakout is on the way, but in which direction?
For four months the price has consolidated within this pattern, making a series of lower highs and higher lows. Prices are squeezing towards the apex of the triangle, and the closer it gets—the higher the odds for a breakout.
At the time of writing, Bitcoin is changing hands for $7635. Since the last update, the crypto boss has continued its rebound off the lower confines of the symmetrical triangle, and indicators show potential for the bullish trend to continue—especially if the RSI manages to break and hold above the 50 handle. If that happens, Bitcoin might then rally further to the upper resistance boundary of the triangle.
Aside from the Symmetrical Triangle, another interesting phenomena has been observed by the traders of crypto twitter. That is, the 6th of the month, which for some unknown reason, has historically been an auspicious date for a reversal in price action, as pointed out by trader Venturecoinist.
XAU/USD – Gold Sits Quietly Under 20 DMA
Over the past week, the bulls and bears appear to have reached a short-term agreement over the price of gold, which has been trading in a narrow range around the $1300 level—a support region that has been in play since early May.
This temporary equilibrium has parallelled a period of relative clam on the geopolitical front, including a wind down in the rhetoric on the trade war between the U.S. and China. Although developments on global trade haven’t been encouraging, it hasn’t been enough to alter the general sentiment around safe havens like gold.
On the charts, this manifests as indecisive price action, which can be seen in the failure of the price of the metal to close above the 20-day moving average (shown in blue), which has happened nine times in the last three weeks.
Looking to the future, the global trade outlook remains uncertain, and the upcoming US-North Korean summit could bring turbulence to the market. Should geopolitical turmoil prompt an upward breakout from this narrow range, resistance could be expected at $1,300 followed by $1307, where every advance in recent weeks has been halted at the 200-day moving average (shown in purple).
A move beyond this would be very bullish, and could lead to further upside beyond $1315 towards the May 11 peak at $1326.
To the downside, strong short-term support is seen at $1,289, and a break lower than this could possibly clear the way for a test of $1,282.
Disclaimer – the content of this article is merely educational, and you would be well advised to do your own research before making any financial decisions. This is not financial advice.