With safe-haven purchases, gold finished last week at an 11-month high. In addition, Monday continued on its way and broke above $2,000. Bitcoin, on the other hand, closed last week with a gain of over 23%. The banking crisis in the US and Europe seems to have pushed investors looking for a safe haven to buy Bitcoin and gold.
Bank failures created strong demand
cryptocoin.com As you follow, the bankruptcy of two US banks and the liquidity crisis at Credit Suisse created strong physical demand ahead of this week’s Federal Open Market Committee meeting. TD Securities analysts say bank liquidity concerns will limit central banks’ fight against inflation, which will boost investment flows. In this context, analysts make the following statement:
The bar remains low for additional trend follower purchases as prices continue to rise towards the FOMC. Subsequent buying activity is likely to occur above the $1,985 and $1,995 marks. And this can see that the algos can add more than +8% of their maximum size.
For the Fed, analysts at TD Securities are expecting a 25 bps rate increase, bringing the Fed Funds rate to 4.75%-5.00%. They explain their predictions as follows:
Post-meeting communication will likely highlight that the Fed is not yet done in terms of tightening (also reflected in a slightly more hawkish dot plot). Authorities also point to a more uncertain economic environment, putting even more emphasis on data dependency.
Gold analysis of the week
Technical analyst Ross Burland draws the technical picture of gold on the charts as follows. Below is a series of charts showing current resistance areas and potential support structure as gold enters the highs of $1,980 in anticipation of a correction ahead of the Fed.
The daily chart above shows the possibility of a correction towards the trendline support.
When zoomed in, the 50% average return aligns with the dynamic support.
If we dive into these lower timeframes, $1,974 stands as a key support structure.
Being on the forefront of the trend, the trend is bullish but a break of the support could be the start of a significant downtrend in the coming days.
Bitcoin price analysis of the week
Crypto analyst Rakesh Upadhyay points out the following levels in Bitcoin’s technical outlook. The leading crypto completed an inverted head-and-shoulders pattern by breaking above the $25,250 resistance on March 17. In such cases, a breakout from a major setup often returns to retest the breakout level. However, in some cases, it is possible for the rally to continue without slowing down.
BTC daily chart / Source: TradingViewThe 20-day exponential moving average ($24,088) and the relative strength index (RSI), which are rising in the overbought zone, are taking advantage of the buyers. If Bitcoin breaks above $28,000, the rally could gain momentum and BTC price could rally to $30,000 and then $32,000. On the other hand, this level is likely to witness strong selling by the bears. Another possibility is for the price to drop from the current level but recover from $25,250. This also means that the bullish trend is maintained.
However, the positive view will be invalidated in the near term should BTC drop below the moving averages. Such a move indicates that a break above $25,250 could be a bull trap. It could also open the door to a possible drop to the psychologically critical $20,000 level.
BTC 4-hour chart / Source: TradingViewThe four-hour chart shows that BTC is facing a profit reservation near $27,750. But there is a positive sign that the pullback is shallow. Buyers will try to push the price above $28,000 and continue the uptrend. Bitcoin could then climb to $30,000. On the other hand, if the price drops and dips below the 20-EMA, it will indicate that traders are rushing to the exit. This could push the price towards the crucial support of $25,250, where the bulls and bears could witness a tough battle.
