Weekly Price Analysis #16 - Week 33

Welcome traders and investors, to another week in the worlds of bitcoin and gold!

BTC/USD - Ranging Outside the Bear’s Lair

Currently trading at $6,469, the bitcoin sell-off has subsided this week, with the crypto king bouncing firmly off the $6,000 mark last Friday (10th).

However, despite successfully defending the 2018 lows, the bears are still overwhelmingly present, leaving bitcoin range-bound between $6,000 and $6,600.

The topic of the week on Crypto Twitter has been the long to short ratio on margin exchanges Bitmex and Bitfinex. As bearish sentiment has crystalised, shorts have seen a parabolic rise, leading many traders to anticipate a short squeeze. Any upside, however, has been sharply capped around $6,550, including any bullish momentum generated by the expiration of a futures contract on the 15th, which has traditionally caused positive price action.

Looking to the future, while downside looks likely to continue in the medium-term, a short-term, move upwards could be a possibility, which would face resistance at the key region of $6,550 to $6,600—a price level that has been touched multiple times and proven difficult to break. Should this resistance weaken, then bitcoin could set sights on the $6800 - $7200 range

To the downside, support remains at the key 2018 low of $5,740.

XAU/USD - Gold continues its descent

At the time of writing, gold is trading at $1,177. Further strength in the U.S. dollar has put the price of gold back under pressure this week, creating increased bearish momentum that has maintained the recent downturn.

As pictured on the chart, the 50 day (blue), 100 day (red) and 200 day (yellow) Moving Averages are now stacked, showing the full extent of this three-month downtrend.

Geopolitical events have been dominated by the Turkish Lira crisis, which despite sending the currency spinning down 20 percent in response to Trump’s tariffs on Turkish steel and aluminium, haven’t driven demand for the traditional safe-haven asset.

The Turkish Lira recovered on Wednesday after Qatar promised to invest $15 billion in the country, but gold prices continued to drop, only to settle on Thursday as the U.S. dollar also steadied. Meanwhile, U.S. economic reports continue to show strength, and updates to the U.S. Retail Sales report showed household spending increasing 0.5% in July, instilling a sense of optimism on future U.S. economic growth.

Today, the price of gold has seen a slight uptick, with the dollar slipping as the U.S. confirm trade talks with China. Should this continue, the price is likely to face resistance at the $1,180 level, a break of which will aim at the $1,190 level.

To the downside, support comes in at the $1,170 level where a break will turn attention to the $1,160 level.

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.