Bitcoin, Gold, and Silver for safety

Bitcoin continues to move towards current pattern resistance

After Bitcoin’s massive and strong move during Labor Day’s session (September 2nd, 2019), Bitcoin continues to drive higher. Bitcoin is up more than +3% on the day and looks to close above the previous congestion zone between 10082.50 and 10410.46. There remains some near term resistance ahead for Bitcoin. The first level of resistance is the 0.618 Fibonacci arc which is in the 10800 value area. Above that are the shared resistance zones of the downtrend line and the 45-degree angle at 11300. There is some strong evidence suggesting that Bitcoin will continue to rally higher. The %B oscillator is part of the Bollinger Band trading system and is a great measure of whether something is likely to break out of resistance or find rejection. The current daily candlestick is displaying one of the key behaviors that I look for to take a long position: the %B line crossing the 0.7 level. If Bitcoin can close the day with the %B above 0.7, then the move higher will more than take out the top of the bullish pennant. There’s enough momentum in this kind of reading that Bitcoin could launch towards the 16000 value area. We also need to be aware that the RSI has moved above 50 and is not even close to being overbought. Bitcoin could very well be starting a move very similar to what we saw happen from December of 2018 to June of 2019.

Gold

Gold continues its impressive run in 2019. Gold broke an area of resistance that had lasted for 6 years back on June 19th, 2019. Just as impressive isthe percentage gain from the 2019 lows. From the 2019 low of 1266.38 gold has moved as high as 1555.82 — a +22.80% gain. And if the trend continues, gold looks like it will move and break that high as well. In fact, gold is currently trading just $10 below that 2019 and 6-year high. It is currently up against a powerful square of price and time, so a deep pullback here should not be a surprise. But if a corrective move here does not occur, then we may see a prolonged continuation move for the remainder of the year.

Silver

While gold’s +22.80% gain is impressive, silver outshines (pun intended) even gold. From the 2019 low of 14.29 on May 28th, 2019 silver has moved up more than +34% (+$4.87) to 19.17. That high was reached while I was writing this article and that high may be broken when this is published. Silver has had a massive +3.78% gain for the day compared to golds +1.08%. Just last week silver made new two-year highs. Silver is currently less than $1 away from generating new 3-year highs. The silver trade here is very, very interesting because it has broken above the 2/8th Major Harmonic: a notoriously difficult level for price to move through. If it can maintain a level above that Major Harmonic (which is at 18.91), then there is a very strong chance we see it launch towards the 3/8th Major Harmonic at 24.16. The last time silver was trading at that level was back in August of 2013. The 10-year midpoint for silver is the 4/8th Major Harmonic at 29.41, a level that silver could reach with very little resistance as it has been almost 7 years since silver has traded in that area. If we consider that silver has been trading in a range between the 1/8th Major Harmonic at 13.66 and the 2/8th Major Harmonic at 18.91 for the better part of 5-years, then we should expect a tremendous drive higher in the future.

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Technical analyst, investor, trader, social distancing since before it was cool

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Jonathan Morgan

Jonathan Morgan

Technical analyst, investor, trader, social distancing since before it was cool

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