When the coronavirus pandemic began to shut down economies around the world, investors did what they typically do amid economic uncertainty: they fled to safe-haven assets. Only this year, gold and cash weren’t the only safe haven plays.
Bitcoin is up about 190% year to date, outperforming a mix of major assets, including gold. And unlike its rally in 2017, analysts don’t think we are heading toward a bursting price bubble anytime soon.
Tom Fitzpatrick, global head of CitiFXTechnicals, said the charts signaled that bitcoin could reach $318,000 by December 2021, in a report meant for Citibank’s institutional clients.
Meanwhile, the price of gold has been sliding since its all-time peak in August 2020, not least of all because of optimism over progress on the Covid vaccine front.
Let’s face it, who needs a safe haven if the pandemic is over? And if you still want a safe haven, you’re not looking at gold. You’re looking at bitcoin.
Part of what is different about bitcoin’s rally in 2020 versus 2017 is that institutional investors are adopting bitcoin, lending it newfound legitimacy and helping to erase the reputational risk of investing in the cryptocurrency.
Old-school, billionaire hedge fund managers Stanley Druckenmiller and Paul Tudor Jones now own bitcoin and big fintech players like Square and PayPal are also adding crypto products.
Bitcoin is now a regulated financial asset that is uncorrelated with the high-risk adjusted return, and that’s why we’re seeing a record percentage of institutional flow enter through our brokerage and exchange platforms.
It’s for all these reasons and others that bitcoin is being seen as a true safe-haven asset; a digital gold.
But keep in mind, bitcoin has a long history of wild volatility. While 2020′s price moves look to be more stable than in rallies past, ultimately we just have to wait and see how bitcoin performs over time.
It would be difficult to label a nascent asset like bitcoin as a safe haven as it has not yet withstood the test of time. It might be more accurate to say that it is chomping on its [gold’s] market share as the go-to inflation hedge.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1,927.37.
The projected lower bound is: 1,798.46.
The projected closing price is: 1,862.92.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.5692. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 6 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 53.36. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 12 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 110.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 9 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAU= closed down -0.636 at 1,863.510. Volume was 8,900% above average (trending) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume 1,864.000 1,865.510 1,861.700 1,863.510 4,193
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1,849.44 1,871.51 1,813.17 Volatility: 17 22 23 Volume: 419 84 21
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAU= is currently 2.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods.
Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 1 periods.
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