Investor confidence in the global financial system has been shaken by the collapse of Silicon Valley Bank and Credit Suisse. As a result, many are turning to bearer assets, such as gold and bitcoin, to store value outside of the system without relying on third parties. This has led to a surge in demand for physical gold bars and coins, with some investors even calling for hyperbitcoinisation. With a potential target of around $35,000, both gold and bitcoin may continue to increase in value. Hyperbitcoinisation is a hypothetical scenario in which Bitcoin is widely accepted by merchants and individuals alike, leading to its price rising dramatically and it becoming the dominant form of money in use.
How does this reflect on the Technical Analysis side of things? Let’s see;
US Dollar – 4H
The US Dollar (DXY) after a long bearish run has commenced a move that can be considered as a retracement move; since it has not yet broken through any major price levels yet. This retracement has, however, reached the 88% of the Fibonacci retracement, and there is also the 50-period MA acting as a resistance. Should this play out and the Dollar indeed gets weaker, we can expect to see higher prices on Gold and Bitcoin as investor flock into these ‘safe havens.’
- Direction: Bearish
- Target: 102.330
- Invalidation: 103.600
XAUUSD – 1H
XAUUSD is currently stalking the supply zone at the $2004 price region. If price should be rejected from that zone, I have marked out the $1970 area as a point of interest where we may get to see Gold resume its bullish momentum. The presence of the 50 and 100 MAs is an added confirmation of the bullish intent.
- Direction: Bullish
- Target: $2011.00
- Invalidation: $1962.70
BTCUSD – 1H
BTCUSD (Bitcoin) began a bull-run early this month and has since then maintained a strong bullish sentiment with very abrupt retracements. The current price action on Bitcoin suggests, however, that another retracement could occur – based on the attenuation around the 100 MA. My expectation is that Bitcoin dips slightly lower than the 200 MA and the trendline support, before resuming its bullish momentum.
- Direction: Bearish
- Target: $28,000
- Invalidation: $26,000
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.