Welcome Vaultorians, to another weekly update on the movements of Bitcoin and gold.
BTC/USD – How Low Can Bitcoin Go?
After a sharp decline in price over the last few days, the leading cryptocurrency is trading at $5,560.
The slight pullback of last week seems to have progressed into a longer-term trend, and bitcoin has now broken out of the long-term descending triangle, which had been in play for most of this year.
Once the key support at $6,100 cracked, panic selling ensued, and the price entered freefall — dropping over 15 percent to reach new yearly lows.
Some traders are have correlated this price drop with the so-called “hashrate war” being waged between the two bitcoin cash forks, bitcoin cash ABC and bitcoin cash SV. The tension has been building for some time, but after a volley of Tweets in which bitcoin cash SV mouthpiece Craig Wright threatened to force bitcoin down to $1,000 with a massive sell-off, if miners switched to the bitcoin cash ABC chain.
As if by magic, the price of bitcoin jumped off a cliff, and is now sitting on thin support.
All eyes will be on the weekly close to set the tone for the next few weeks and months. If we manage to regain some ground, this episode might be forgotten, but that would require a conclusive move above $5,800.
Until then, bitcoin looks to be heading lower, and a fresh wave of selling is likely to send the price down to the next key support art around $4,800 handle, although buyers are likely to step in at the psychological level of $5,000 for a bounce.
XAU/USD – Gold Bounces, But Can it Last?
After a neat rebound off the $1,200 level, gold is trading at $1,216.
The week started on a negative note, with gold prices edging lower as the US dollar hit highs against the pound.
After finding support at the key $1,200 handle, gold reversed and continued to rally on Tuesday and Wednesday, buoyed by fears of a global economic slowdown, political uncertainties surrounding Brexit, and a slight retreat in the dollar.
This rally is now testing a critical inflection point — against former support turned resistance on the daily chart, and the 50 EMA.
A conclusive break above this zone would be bullish, and could give enough momentum to test $1,235 and critically, $1,240, which would be likely to invite more buyers to put a bid under the metal.
To the downside, a break of the lower trend line could lead the price to test support at $1,200 , below which we are likely to retest yearly lows.
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.