Weekly Price Analysis #9: Week 26 - 2018

Welcome investors, to your weekly update on Bitcoin and gold. Read on to discover the latest movements in these markets.

BTC/USD - Bitcoin Falls Through the Floor, but What’s in the Basement?

It’s been another tense week for Bitcoin, which is currently trading at $5,899, after finally breaking below the $6,000 level on late Thursday evening (28th, UTC.)

Prior to the drop, Bitcoin had been trading in a narrow descending channel, but prevailing bearish sentiment has pushed the price further down, where it has broken a key psychological support level at 6k, a level that had previously held as strong support over the last week.

Bitcoin has now lost about 20% of its value in June alone, bringing new lows into play that haven’t been seen since mid-November 2017.

Despite the downturn, recent news is by no means negative. Facebook is relaxing its ban on cryptocurrency advertisements, and a study from ING bank has found that while only 9 per cent of people in Europe, Australia and the U.S. own cryptocurrency, 25 percent are open to buying in the future.

The news has failed to give the bulls any momentum, and despite a slight bullish divergence on the RSI, the bear grip remains strong - with buyers remaining in the minority.

Looking ahead, a break below $5,850 could spell short-term destruction for Bitcoin, leading to a test of horizontal support at $5,450 and psychological support at $5,000.

To the upside, a bullish bounce would have to reach the $6,800 region before the bearish turn could be considered reversed.

link

XAU/USD - Gold Sinks to Historic Lows

As if mirroring the movement of Bitcoin, gold is also testing key support levels today, and is currently changing hands at $1,250.

A death cross formed on the chart last friday, where the short-term, 50-day moving average (shown in green) moved above the long-term, 200-day average (purple), suggesting that an immediate change in direction was likely. After printing repeated red candles on the daily chart, gold reached a low of $1,245, a level not seen since December 2017.

Growing tensions around the possibility of a global trade war, and strong performance of the dollar against another market currencies, have created this bearish sentiment around gold.
US rates have also been dropping, and the Fed is expected to raise interest rates several times this year, which is likely to dent gold prices.  

In the short-term, gold appears to have found a temporary bottom at the $1,246-8 region, and has been edging up over the past 24 hours, shifting away from the six month low.

The long-term outlook however, remains bearish, and further downside could see the $1,240 level come in to play, with a break of this level putting $1,230 into focus.

Conversely, should bullish momentum return, resistance could be found at the $1,260 level, a break of which would bring the $1,270 level into play.

alt

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.