Weekly Price Analysis #36 - Week 2 - 2019

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

BTC/USD - Bitcoin Falls After Failing to Crack $4,000

After failing to conclusively crack the $4,000 level, bitcoin has fallen through support at $3,800 and is now sitting at $3,650.

The leading cryptocurrency has been trading against the $4,000 region since before Christmas, and has managed to push through on several occasions, only to be forced back down as sellers stepped in.

On Thursday morning, the price touched a long-term descending trendline dating from December 2017’s all-time-high, and then took a decisively bearish turn. The following breakdown resulted in an almost ten percent drop over the following 24 hours, with price eventually finding support at the $3,600 level.

This move down, along with continued declines in volume, has conclusively invalidated the inverse head and shoulders pattern mentioned in last week’s update, and has pushed the crypto “Fear and Greed” index right back into extreme fear.

At present, bitcoin is now bouncing unconvincingly off the $3,600 level, with low volume. Any bullish scenario would require a convincing move upwards from here, with bitcoin printing a classic ‘Bart’ pattern before finally breaking $4,200.

If the price moves lower, then the key level to watch is $3,200. A break through this floor would
signal that the latest bounce is over, and that ‘crypto winter’ could be set to continue. Below $3,200, the next significant support can be found at the $2,500 region, and then at the $2,000 region.

XAU/USD - Gold Prepares to Punch Through $1,300

Gold is currently trading at $1,292, showing little change from the previous week.

On the charts, the metal has been trading in an area of congestion below the $1,300 level which is proving to be a significant area of resistance.

Demand for the metal has risen this week on weakness in the greenback, which has lost strength as the political impasse over border wall funding continues, and Federal Reserve officials making dovish hints about inflation — suggesting that 2019 might hold fewer rate hikes than previously anticipated.

On this news, the dollar is hitting its lowest levels in three months (as measured by the DXY, which tracks the greenback against basket of other major currencies).

Looking ahead, gold now looks primed to once again test the $1,300 level. This is supported by the formation of an ascending triangle on the 4H chart, with a top trend line at around the $1,297 level. If this triangle breaks upwards, then further resistance could be found at $1,315 and $1,325.

Should we fail to break the $1,300 level and move lower, then strong support could be found at the $1,280 level — as shown by the long-wicked candles which have built up on the daily chart. Below that, support could be found at $1,268 and at $1,250.

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.