Bitcoin (BTC) starts to run with gold in face of worsening US/China tariffs war

China ups the trade war ante by warning other countries over making any trade deals with the US that might be detrimental to Beijing. Ahead of US stock markets opening on Monday, gold is up again, just shy of $3,400. Bitcoin is following, up 2.8% so far on the day, and fast approaching a potential break in the downward trend at $88,600.

Trade and real wars still worry markets

In a statement that escalates the current tit-for-tat trade war between the US and China, countries that are working out trade deals with the US were warned by Beijing that should these deals be “at the expense of China’s interests”, the Chinese government will impose “countermeasures” against those countries.

On another geopolitical front, US President Donald Trump has said that peace talks between Russia and Ukraine must start to bear fruit soon or the US could walk away from the process. The short Easter truce announced by Russia’s President Putin has now ended, with both sides accusing the other of breaking it on many occasions.

Flight to gold continues unabated

Source: TradingView

In the face of these, and other geopolitical, and economic tensions, the gold price is still maintaining its steep price ascent – up 2% on Monday so far, and having broken through the 2.618 Fibonacci level. The 3.618 Fibonacci level is at $4,190, and this could even be reached by the end of this year.

$BTC breaks out of pennant

Source: TradingView

The 4-hour time frame for the $BTC price shows a breakout of a pennant formation that had been building as $BTC moved sideways following the break of the main descending trendline. Currently at a level of resistance around $87,300, if the price can push through this, the all-important horizontal trendbreak level of $88,600 is not far overhead.

There is some support at $87,000, and it might be that the price will come back to test this. Also, there has been no confirmation of the pennant breakout, so price could also come back to test the top of the pennant. These scenarios are still very bullish going forward, and only a loss of the $84,000 horizontal level could spell more trouble to come.

Macro $BTC picture is bullish

Source: TradingView

Zooming out into the weekly time frame, the set-up for Bitcoin does look very bullish. The candle formation can be drawn as a descending wedge, and it is obvious that the price has broken out of this. The Stochastic RSI towards the bottom of the chart could be about to signal upside price momentum as the indicator lines cross the 20.00 level. At the same time, the RSI indicator line has crossed up through the down trend line, suggesting that buyers are starting to come in.

A big surge could take place perhaps this or next week, and this could push the price back towards the high. A lot of resistance will be waiting at $94,000 to $95,000, but if the bulls can push through this, the all-time high at $109,000 will be at threat.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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