At a glance it is easy to see why someone should be bullish on Gold over Bitcoin as the weekly chart has been trending down for so long. But one has to survey the fundamentals too. The global markets are in turmoil, which is good for gold, so the green line is the target right?. But wait… what about Bitcoin fundamentals, are they even more bullish? One could argue that they are.
Bitcoin mining output is halving in the summer of 2016, current mining difficulty is very high, and there are a lot of big players on Wall St. investing in blockchain technology. Not to mention that in global crisis the price of BTC tends to rise and act like Gold does. Then from a technical perspective BTC has completed a crash cycle and therefore can easily run to a double top or even new all time high in the next 12 months. If Bitcoin is in a bubble pattern then a new all-time high could happen in, let’s say, Feb 2017.
As for today’s particular chart, Gold has to overcome that nasty yellow weekly candle and then perhaps the Bitcoin explosion could be culled. However in my experience with this program it has shown me more often than not the yellow candle is not a true reversal, but more of a short squeeze. Global markets have been trending down for a while and a bounce needs to happen in the mid term, that would be bearish for gold, and it seems BTC is going up in the mid term on the halving event. These are all valid reasons as to why overcoming that yellow candle is so difficult. The pressure is on gold to preform, and quickly.
Chart is powered by the SCMR Analysis Suite on Tradingview.com