Weekly Price Analysis #27 - Week 44 - 2018

Welcome Vaultorians, to another weekly update on the movements of Bitcoin and gold.

BTC/USD - Bitcoin Settles Into New Range

At press time, Bitcoin is trading at $6,344.

This week marks an important event — Bitcoin’s tenth birthday, but unfortunately, the price hasn’t been celebrating, and remains coiled in a relatively tight range.

The most significant movement in over two weeks happened on Monday, as Bitcoin dropped out of the range that had kept it trapped, and found support around $6,200 as buyers stepped in.

The price remained in this region until Wednesday, when Bitcoin rallied around two percent before the monthly close at $6,308 — making this monthly candle the lowest since October 2017, and with the lowest accompanying volume since October 2016.

November and December however, have historically been strong months for Bitcoin, and as the price now seems to be settling into another range topped around $6360, traders are beginning to ask if the year will be ending on a positive note.

At present however, Bitcoin is looking weak. After touching resistance around $6,360, the RSI is dipping down, suggesting that a fall to the $6,200 region could be on the cards. If the bears do manage to break through this level, then a quick fall to $6,100 and $5,850 is possible.

If the bulls succeed in breaking through the previous channel at $6,360 and $6,470 a rally to the $6,800 region is possible.

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XAU/USD - Bullish Monthly Close for Gold

Gold is trading at $1,234, the yellow metal closed October with an almost two percent gain —, the biggest monthly move up since January. This bullish monthly close fired up the market, and the price has been climbing since.

Much of the rise of this month can be attributed to the steep drop in global equities, which has reignited safe-haven asset demand for the metal.

Still, gains could have been far more significant, and were cut back earlier this week by better-than-expected earnings in the tech sector.

The dollar (as measured by the Dollar Index) has continued to push up this week after the release of economic data showed that private payrolls grew by 227,000 for the month, above the economists’ forecasts of 189,000.

Renewed trade war concerns between the U.S. and China has also prompted some investors to seek the dollar over gold as a safe-haven, ready for the widely-expected Federal Reserve rate hike in December.

This pushed the dollar up to target near 16 month highs, making dollar-denominated bullion more expensive for the rest of the world, and pushing the price down.

As the dollar slowed its ascent on Thursday however, and gold finished October with a bullish monthly close, there was a strong resurgence and the momentum gained so far looks promising for the future. If this trend continues, then a clean break through resistance at the $1,240 region would set $1,266 in sight.

Should we move lower, immediate support could be found around $1,223, $1,214 and potentially at the old resistance level 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.