Weekly Price Analysis #24 - Week 41 - 2018

Welcome Vaultorians, to your update on another wonderful week in the worlds of Bitcoin and gold.

BTC/USD - Fakeout Leads to Plunge

The leading cryptocurrency is now trading at $6,334 on the Binance exchange.

After a few weeks of calm ranging, the price plummeted on Thursday, dropping nearly five percent over the course of 90 minutes.

This violent move followed a brief crossing of the diagonal trendline which has acted as resistance for bitcoin over the past few months. After lingering beyond the trendline for a few days, the price dropped below, and eventually decided to plummet around $400.

This fall found support around the $6,220 region, where it has now formed a channel with a top around $6,350 — an area currently being tested.

Aside from the price action, a discrepancy has emerged this week between the price of Bitcoin on exchanges where it is traded against Tether (USDT), and those where it is traded against the dollar directly (USD). Tether exchanges Bitfinex and Binance are consistently posting prices around 200 dollars higher than those on exchanges like Bitstamp which deal directly in fiat.

Looking ahead, the RSI is showing strength across multiple timeframes, and short-term bullish price action suggests Bitcoin could be about to print another “bart” — albeit an inverted version, and a decisive break of the temporary range top at $6,370 would make this bullish scenario very likely.

If price moves south, then a weekly candle close below $6,100 would be very bearish, and is likely to postpone any bullish movement for the foreseeable future.

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XAU/USD - Gold Rises as Equities Fall

All eyes have been on the global stock sell-off this week, but as the S&P 500 has been falling, the price of gold has soared — clocking 2.3 percent growth in a single candle on Thursday, the largest daily gain since June 2016.

Last seen trading at $1,219, gold has been stuck in a narrow corridor of price action in recent weeks, and the breakout has come as welcome relief — slicing cleanly through the top of this well-established channel, and facing only a little resistance at $1,220 before eventually petering out at $1,226.

The yellow metal has continued to show strong correlation with the US dollar this week, which has been sinking as movements in broader financial markets have created risk averse sentiment. The S&P 500 has now slid below its 200-day moving average for the first time in months — a line which is widely thought to be the threshold between bull and bear markets.

Should risk averse sentiment continue to build, then a move to the upside could be on the cards, this would face resistance around the $1,224- $1,226 region.

If price collapses, then support could be found at the top of the range previously broke out of at around $1,208.

*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.