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Bitcoin And Gold's Divergence Could Be About To Get Tested

By Matt SimpsonMarket OverviewAug 15, 2019 12:48
ca.investing.com/analysis/bitcoin-and-golds-divergence-could-be-about-to-get-tested-200430762
Bitcoin And Gold's Divergence Could Be About To Get Tested
By Matt Simpson   |  Aug 15, 2019 12:48
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With gold prices stretched and Bitcoin around key support, convergence could be approaching.

In previous analysis we’ve highlighted a positive (although imperfect) correlation between Bitcoin and USD/CNY. And in recent times we’ve seen Bitcoin and gold rise in tandem during bouts of risk off, although we can see the relationship has broken down these past 10 days. Curiously, the positive correlation between gold and bitcoin broke down just after USD/CNY broke about 7 – a level many didn’t expect to see break.

In some way this appears encouraging to see as it could serve as a reminder that gold has stood the test of time as the true safe-haven. Moreover, in a world of negative yields, a gold brick that yields zero looks quite appealing.

However, given the strong bullish structure of Bitcoin and lack of mean-reversion on gold, we suspect the two could converge and provide a potential buying opportunity on Bitcoin or (for the more daring) shorting opportunity on gold. Yet, given I’m bullish on both markets overall, the former seems more appealing to my approach.

At time of writing, Bitcoin is trying to form a bullish pinbar on the daily chart. While it may not mark the precise low, it does show a hesitancy to push beneath 9,530 and pace the way for a potential trough.

And withkey support around 9k, bulls could look to buy the dip to trade long within its current range, or position themselves in anticipation for the next impulsive move higher.

If prices are to break beneath key support, it could mark an interim top but, given the bullish structure on the weekly chart we’re on the lookout for its corrective low and for its bullish trend to eventually resume.

Bitcoin And Gold's Divergence Could Be About To Get Tested
 

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Bitcoin And Gold's Divergence Could Be About To Get Tested

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Christopher Patrick Duke
Christopher Patrick Duke Sep 11, 2019 21:55
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some one stole ikine
 
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