Weekly Price Analysis #34 - Week 51 - 2018

Welcome Vaultorians, to another weekly update! As the festive season gets into gear, markets around the world have been volatile, and both bitcoin and gold have made significant moves.

BTC/USD - Is This Just a Relief Rally?

Bitcoin has enjoyed a bullish week and is now trading at $4,001 — an almost 25 percent gain since the last update.

Despite the passing of one of the most significant economic events of the year — another US rate hike — bitcoin barely flinched, and instead rallied up to the $4,000 region.

This strong push up has left traders wondering if the downtrend of the last few weeks was capitulation, or if this move up is just a dead cat bounce before the carnage resumes.

On the daily chart, we can now see a V-shaped formation suggesting a capitulation bottom, with buyers coming in more aggressively than the sellers did over the last week and creating long green candles pushing upwards. This idea is supported by trading volume, which has picked up over the past few weeks.

After such a promising push up, a fall back now could be fatal — bringing the reality of a dead cat bounce home to traders, and sending bitcoin down to meet new 2018 lows.

Peter Brandt — the veteran commodities trader — has suggested that a $1,200 low could be in store for bitcoin if the crypto drops below $3,000 before 2019.

Such a level seems unlikely given the current bullish sentiment, but if we did move lower, then support could be found around $4,000, $3,900, and $3,630. At each stage higher volume could be expected as buyers step in to acquire long-term positions.

At present, bitcoin seems to be holding the $4,000 level with strength — and despite brief departures down to the $3,800 level, each dip is met with keen buyers, creating long wicks on the candles as the price is pushed back up.

If the bullish sentiment continues, need to get through $4,200, $4,600, $5,600, and ultimately the key bull/bear line is at the previous strong support at $6,000 — a region that is now likely to act as similarly strong resistance.

XAU/USD - Gold Pushes up as Stocks Sink

Gold is now trading at $1,258, representing a ~1.6 percent gain since last week’s update.

The week started on a positive note, with gold pushing up against resistance at $1,250. The on Wednesday the yellow metal blasted through this level as the Federal Reserve raised the benchmark interest rate, and lowered projections for future hikes next year,

This sent shockwaves through global markets, pushing stocks and the dollar down, but catalysing a rally in gold, which hit highs of $1,266 before pushing back down as the dollar recovered.

Looking ahead, the future looks bright for gold — The trend is up and momentum is building, but much will depend on the movements of the dollar.

If the price manages to surpass the highs set at $1,266, then further upside could be in play —- with initial targets set at around the $1,282 level.

Should more downside comes into play, then we could expect gold prices to find support at around the $1,252 level, then $1,220.

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.