Weekly Price Analysis #32 - Week 49 - 2018

Welcome Vaultorians, to another weekly update on the movements of bitcoin and gold!

BTC/USD - Bitcoin Hits a New Low for 2018

Bitcoin is now trading at $3,390 on Bitstamp: a 14.5 percent drop since the last update, and an 82 percent drop from the all-time-high of December 17th.

Over the last week, bitcoin has traded in a descending channel, with each lower low followed by a brief upward spurt as the shorts get liquidated, before the downturn continues.

Then, in the middle of the night (UTC) on Friday morning (7th), bears got impatient and pushed the price through the floor until buyers stepped in at $3,300, a price not seen since August 2017.

In the fundamentals, there has been more bearish news that the SEC decision on the VanEck SolidX Bitcoin ETF has been postponed once again, contributing to negative sentiment.

Bitcoin shorts are now nearing their all-time-high, and if price manages to fight up far enough, then these shorts are going to get squeezed — potentially causing the price to surge and hit previous support at the $4000 level.

If we swing down towards new yearly lows, buying can be expected at the $3,000 region, $2,400 and $1,850.

XAU/USD - Gold Swings Higher as Stocks Fall

After a bullish week, gold is currently trading at $1,240, representing a 1.5 percent gain over the seven days.

Gold gained a total of $17 on Monday and Tuesday, hitting $1,243 as the dollar flatlined at $97.
Then on Wednesday, the stock markets stayed shut in honour of President Bush and gold stayed steady.

As markets re-opened on Thursday, equities tumbled, sending gold skyward to take back the lead from Palladium — which has seen a rally in recent weeks fueled by fresh demand for the metal as consumers turn away from diesel towards petrol-powered cars, which use more palladium in autocatalysts.
Geopolitical events have also boosted gold’s appeal, with the general risk-off attitude compounded by news that the U.S. Treasury yield curve inverted earlier this week, which is taken as an early indicator of an economic slowdown.

That, and uncertainty surrounding the Brexit vote next week, concerns over Italy's budget crisis, and continued trade tension between the United States and China: all factors turning investors away from risky assets like stocks, and sending them towards safe havens like gold.

In the short-term, the biggest influence on price direction could be U.S. economic data. Unemployment data, wage data, and U.S. nonfarm payrolls data are expected to be released today, which could give traders clues to the health of the world’s biggest economy and the likely future of monetary policy.

If risk aversion continues, immediate resistance lies at $1,244, beyond which resistance could be found at the $1,265 area.

If the rally loses steam, then support could be found at $1,236, $1,221, and then $1,200.