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Bitcoin headed back to space? When will metals turn?

Commentaries & Views

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Gold has printed another lower low since I amplified my suggestion for caution mid-last week, this time bottoming at around the $1910 spot. There is no doubt that this grind will eat up both bull's and bears' emotional capital; sometimes, it's about knowing when to just not play.

The chart below is a slightly more zoomed-in view of gold. The 4-hour time better displays the downward trajectory in play since I first warned that caution was necessary following the original downward breach and failure to recapture $2010. Could we get a bounce back up to $1960 here (top of descending channel)? The answer is yes, but I expect resistance at $1940 – Friday's high of the day and 50-MA. Traders looking to play this channel should be extremely nimble, in my opinion. Note that momentum is already turning down on the timeframe.

Compared to the price action in Bitcoin on the same timeframe - momentum looks to be bottoming out while the price is consolidating within a higher range following last week's breakout. As I have written numerous times in the past, traders are prone to taking profit right before obvious overhead resistance is reached (32k in this case) because, really, who needs the last 1% when you're sitting on 15%, especially when it comes in a matter of days?

That said, I remain bullish on Bitcoin. The velocity of last week's move opens the door to the 38k level, in my opinion. A dip to the 50-MA from 29k to 28.5k level first would be completely acceptable, and a spot to add (or enter) positions for another leg up.

Finally, a look at S&P futures on the same 4-hour chart. The gap I had been pointing to for a couple weeks remains a viable target, with price now guided by a clear overhead trendline serving as resistance till proven otherwise.

Thanks, and have a great week.

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