Weekly Price Analysis #39 – Week 5 – 2019

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

BTC/USD – Bitcoin Eyes Further Losses

Bitcoin is now trading at $3,397 on Bitstamp, representing a 4 percent drop since the last weekly update.

After breaking through support at $3,500 on Monday, bitcoin found support at the $3,360 region and made an unconvincing bounce to the $3,460 region before falling back down.

As mentioned in the last update, bitcoin is now on the brink of the longest bear market ever, and could also be about to pass another milestone: the most consecutive losing months, which currently stands at six.

Since August 2018, bitcoin has been locked in a downtrend, and hasn’t printed a single green monthly candle. Although February has historically been bullish for bitcoin, it now looks set to hold more downside, or at least sideways shuffling.

Away from the charts, several positive developments are underway — with both Fidelity and Nasdaq working on platforms that could help give institutions the trust needed to enter the space. However, as typical in a prolonged downturn, the good news has failed to move the market.

Looking to the future, this recent fall has made a retest of the December lows at $3,120 look more likely. If price falls through the floor at the $3,330 region, then it might find support in the $3,235 area, but otherwise looks likely to test the bear market low.

Should the price move back up, then immediate resistance could be found at the $3,480 region, the $3,620 region, and then around $3,700.

XAU/USD – Gold Hits Seven Month High

After a very bullish week, gold is trading at $1,319 — an almost 3 percent increase since last week’s update.

Technicals and fundamentals have collided to create a perfect catalyst for gold, which finally broke through the $1,300 level last Friday as the price hit the intersection of horizontal support and diagonal trendline.

Since then, the price has continued to push up on dovish news from the Fed — who on Wednesday announced that the benchmark interest rate was unchanged, and said it would be patient with future rate hikes. This weighed the dollar down while gold continued to push up.

Elsewhere, the World Gold Council published its quarterly report, revealing that in 2018, central banks bought the most gold by volume since 1967. This buying, which many suspect is due to continued global economic uncertainty, has provided continued underlying support to the metal.

With such a lengthy consolidation under $1,300, we could now expect further upside, and the yellow metal looks set to test resistance at $1,326.

If the price pulls back, then support could be found at $1,310, and potentially as far down as $1,280. A move below here however, would suggest that gold has topped.

Disclaimer: This article is for educational purposes only and does not constitute financial advice.