Gold price returns to red zone despite weak US Treasury yields. Markets remain cautious ahead of Fed Minutes and impending death cross. According to market analyst Dhwani Mehta, gold is likely to sell below $1,800. FOMC meeting minutes are important in the crypto market. Crypto analyst Arman Shirinyan explains why Bitcoin should be watched closely this week.
Gold and Bitcoin investors focused on this date
cryptocoin.com Gold witnessed an impressive recovery on Friday. However, it continues its downward momentum at the start of a new week. The US dollar consolidates minor recovery amid renewed slump in Treasury yields and lower S&P 500 futures. The mixed market mood and the holiday-weakened trade kept the gold bulls at bay, according to Dhwani Mehta.
Also, the analyst notes that a death cross lurking on the daily chart has given gold sellers much-needed boost. Attention is now on the minutes of Wednesday’s FOMC June meeting for the next price direction in the shiny metal. Meanwhile, the Fed’s rate hike expectations and recession fears continue to dominate the markets. The analyst says that it will continue to affect the dynamics of the bullion price.
Important levels to watch for gold price
Dhwani Mehta looks at the technical view of gold with the Technic Confluence Detector. Mehta explains her analysis as follows. He states that the gold price tested the one-week Fibonacci 3.2% support at $1,806. It also shows that below this, the next downside target is aligned with the previous month low at $1,803.
The confluence support of the one-week Fibonacci 23.6% and the one-day low Bollinger Band at $1,798 will then come to the rescue of gold buyers. The last line of defense for gold bulls stands around $1,794. THIS level is the 61.8% one-day Fibonacci convergence and the S1 one-day pivot point.
On the flip side, Friday’s high of $1,812 will tempt buyers. Above this they will need to recapture SMA5 at $1,816 one day. The cross of the 23.6% one-month Fibonacci, four-hour SMA50 and one-day R1 pivot point at $1,820 will be a tough hurdle for the bulls to break.
Why should you watch Bitcoin closely this week?
According to crypto analyst Arman Shirinyan, Bitcoin’s latest price performance clearly shows that there is not enough buying or even selling volume behind the leading cryptocurrency. The analyst says that this also causes a lack of volatility in the market. Arman Shirinyan continues his analysis in the following direction.
Fortunately, extremely low volatility sometimes creates the big moves in the market that we’ve all been waiting for. After the massive crypto market crash in June, most crypto market participants feared trading assets like Bitcoin. He immediately closed most of his positions to avoid further losses.
The lack of volume in the market is the main reason behind Bitcoin’s anemic performance. Since June 21, Bitcoin has lost a little less than 5% of its value. On the other hand, it gained about 5% on June 25. This indicates that the leading crypto remains in a state of consolidation. It also shows that the real buying or selling power is not in the crypto market.
How does volatility push the price up or down?
With the lack of volatility, it is possible for almost any significant exit or entry of funds in the market to cause a crash or a strong rally. Because with the decrease in volatility, we generally see that the liquidity, which is the main tool of controlling the stability in the market, decreases.
The average weekly volatility for Bitcoin remains around 5%. The market should historically expect a short- or medium-term increase in volatility. Unfortunately, this also has the potential to push Bitcoin in both directions. Currently, both bulls and bears are unsure when they will inject money into the market again. Therefore, Bitcoin is still consolidating in the $22,000 to $18,000 range.
