How has the flood of positive news affected Bitcoin and Gold prices in the last few days? And what do the charts say the two assets will perform this week?
A flurry of positive announcements have helped the global financial markets recover in recent days.
While the Federal Reserve decided against lowering its key interest rate last week, a trade deal between the US and the UK started improving the investor sentiment.
This was followed by a ceasefire between India and Pakistan, and most recently a 90-day pause on the chokingly high tariffs that China and the US agreed upon following productive talks in Geneva.
Crypto markets, including Bitcoin, and the precious metals, especially Gold, have reacted positively to these developments. But what do the charts suggest about their price action this week? Let’s find out!
Bitcoin Price Outlook of the Week
Bitcoin reacted to the aforementioned macro developments with a sharp move to the upside that pushed its price above the closely-watched $100,000 level over the weekend.
The legacy coin hit a 4-month high of $105,700, though it has since retreated and currently trades around $102,000, according to data from CoinMarketCap. The daily trading volume is currently up 14% at about $59 Billion.
Recent news has helped BTC break out of the cup and handle pattern as well, formed during the downtrend and consolidation phase. However, much of it is priced in now, and the momentum is turning a bit sluggish.
In the absence of another bullish catalyst, we expect the world’s largest cryptocurrency to trade sideways throughout the week. Nevertheless, our analysis shows that Bitcoin will most likely keep its head above the $100,000 price level.
Gold Price Outlook for the Week
Gold hasn’t responded as positively to recent news and macro developments as Bitcoin or the stock market. This confirms the negative correlation between these assets as investors turn to safe havens during periods of economic uncertainty.
On this first day of the second week of May, Gold prices stumbled and shed $91.6 from last Friday’s market close prices to settle around $3,232. This places it 8% below the all-time high of $3,500 set less than three weeks ago.
The fading investor interest in the precious metal may be attributed to the easing geopolitical tensions and the pause in the trade war. These have the effect of triggering investor appetite for risk assets like Bitcoin and stocks.
This often causes liquidity to flee from safe-haven assets like gold and silver.
Throughout the rest of the week, we expect gold to continue trading sideways. There is also a slight chance that gold prices will slip further down to trade between $3,100 and $3,200 if the stock and crypto markets sustain the current uptrend.
Should You Invest in Gold or Bitcoin?
The ultimate decision on whether to buy Gold or Bitcoins comes down to your investing goal. If you are investing for hedging and preservation of capital purposes only, consider buying Gold.
But if you are looking to grow your capital faster than you would with stocks and real estate, buy Bitcoin.
Remember, however, that BTC is a riskier investment and is often a regular victim of price crash during periods of high volatility.
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