Weekly Price Analysis #47 - Week 13 - 2019
Welcome Vaultorians, to your weekly price analysis! The crypto market is surging, but precious metals have taken a hit — read on to find out more.
BTC/USD - Bitcoin Holds $4,000
Bitcoin is now changing hands for $4,026, a ~1.3 percent increase over the week.
The leading crypto has seen significant volatility, and dipped down to test support around the $3,900 level before finally gaining enough momentum to break through the $4,000 level.
This drop tested the bottom trendline of the bull channel, which still remains intact — suggesting further upside could be in store.
At present, the price is holding strong above the $4,000 level, and pushing against resistance at $4,040 - $4,200. This is now the fourth test of this resistance, and each time it is tested, the rejection is slightly weaker, suggesting that we could soon be set to pass through.
Sentiment on Crypto Twitter has also shifted over to the bullish side, but the fear and greed index remains at 50 — suggesting there is still some indecision in the market.
Although bears have clearly lost strength over the past few weeks, a significant move beyond $4,200 still looks unlikely. More likely perhaps, is that we are entering a transitional phase, of endless sideways grinding, before bulls once again can win out.
Looking ahead, if bitcoin manages to hold above $4,000, then the next key test will be at the $4,200 region — this swing high from February needs to be cleared with strength to open the path towards $5k.
If we do move down and break $4,000, then strong support is likely to be found at $3,900, or the yearly open at $3,700.
XAU/USD - Gold Loses Grip of $1,300
The week has been bearish across precious metals, with palladium down ~15 percent, silver down ~3 percent, and platinum down ~2 percent.
At only ~1.6 percent down, gold has taken the smallest loss over the last seven days, but has still lost critical support at $1,300 after the dollar pushed up against the pound and other world currencies.
Ongoing Brexit talks, and positive developments in the U.S. China trade talks have put a bid under the greenback— a report on Thursday suggested that the meetings in Beijing had taken a constructive turn, causing investors to buy up the dollar at the expense of safe haven gold.
But recent comments from San Francisco Fed President Mary Daly suggest that demand for gold could eventually increase — she said on Tuesday that the appropriate policy was being patient, leading economists to speculate that the Fed are done raising interest rates until 2020.
More fears of recession could also bolster safe haven demand for gold. The U.S. 10-year Treasury yield fell below that of the three-month bill for the first time since 2007 last week, which is a sign of impending economic slowdown.
On the charts, the outlook now looks distinctly less bullish, with high potential for choppy price action moving into April.
Support can be found at $1,280, but if this is broken, then a head and shoulders pattern would have formed over the past three months, suggesting further downside in store.
If we manage to move back up, first resistance is to be found at $1,300. Breaking through this level will put gold back on the bullish track, with the outlook again favouring $1,350.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. It is very important to do your own analysis before making any investment.