Best Bitcoin (BTC) Weekly Close of 2019 Bodes Well: Are You Strapped In for $13,000+ USD?

After an admittedly odd past few weeks of trading, Bitcoin recovered well enough to take its highest close of 2019 thus far.

Despite July and August seeming somewhat lackluster with plenty of flat action, the weekly close at just under $11,500 (Binance) suggests things are looking up. In tandem with the bullish weekly view, a report written by a Goldman Sachs analyst is gaining wide circulation and giving legs to the sentiment that we’re heading higher from here.

In the report, GS analyst Sheba Jafari makes a case for short-term BTC price targets of $12,916 and $13,971. Interestingly, Jafari arrives at those targets through the use of Elliott Wave Theory.

Elliott Waves Explained

It’s no secret that analysts adhere strongly to Elliott Wave Theory. Far from being a one-stop principle that explains everything happening in crypto trading, it does help us tackle the cyclical nature of markets.

Developed by Ralph Elliott way back in the 1930s, Elliott Waves describe the belief that price action plays out over observable patterns that repeat time and time again. In EW Theory, there are two types of waves:

1. Impulse Waves

2. Corrective Waves

Impulse waves are moves in the direction of the predominant trend, whereas corrective waves move against the trend. You can easily think of this by imagining BTC having a strong months-long uptrend, followed by a downward correction. The waves in-line with the uptrend are impulse waves, and those moving against it and pushing the price down are corrective ones.

It’s wrong to think that impulse waves can only correspond to moves up, however. Impulse waves are just about trends, regardless of whether they are up or down. A correction can occur to the upside, shaking out a downward trend. In that case, a corrective wave up would still be properly considered a correction.

Impulse waves move in packs of five, meaning you’ll always get five on-trend impulse waves before being hit by three corrective waves. That gives you a total of eight waves in a given cycle before the next trend takes hold.

Although EW Theory describes market action, it’s also an ace piece of psychological work. Traders’ emotions move in cycles of highs and lows. No one stays positive about a trend forever, and neither do they stay negative. The data which informs traders’ decisions and rationale shifts all the time, making it foolish to stick with any position dogmatically.

The cyclical nature between positive and negative/optimistic and pessimistic states of mind factors heavily into EW Theory’s own dynamic wave structure. Like the market, Elliott Waves never stand still. However, that doesn’t make them ideally suited to short time frame charts. Because Elliott Waves describe trends, they’re best applied to long time frames – especially if you’re just beginning to interpret the market with them.

Gold is “Headed for the Moon,” What Does it Mean for Bitcoin as a Store of Value Asset?

  • Gold is at its all-time highs in 73 countries
  • The yellow metal is “going to go nuts” all thanks to money printing, QE, & interest rate cuts
  • This would be “great for BTC,” further help in determining if it is becoming a true macro vehicle

Gold prices are hovering near $1,500 per ounce on Monday as the US-China trade war drags on and fears of a global economic slowdown increases.

As we start the week, spot gold is steady at $1,496 per ounce while US gold futures have been flat at $1,508 an ounce.

Gold is at its all-time highs in 73 countries

Bill Murphy, Chairman of the Gold Anti-Trust Action Committee (GATA) is very bullish on gold as he points out that yellow metal is at its “all-time highs in 73 different countries.”

In Canada, gold is $100 higher than its previous ATH and US dollars’ gold high is around $1,900 per ounce, and he says that level is gonna break out and start heading for $3,000.

After hitting multi-year highs, the yellow metal is still firmly in positive territory with strong fundamentals behind gold. While the price is edging lower, it’s just a correction needed before moving higher.

“Gold and silver are just going to go nuts because there is no room on the downside in a lot of these markets,” predicts Murphy.

“if they don’t keep printing the money and going to QE and keep interest rates low, it’s going to cause chaos. All I can say is I think gold and silver are headed for the moon,” he added.

On the Weekend, Goldman Sachs cut down its fourth-quarter forecast for US growth as it said recession risks were increasing due to the US-China trade war.

While US President Donald Trump said he’s not ready to make a deal with China, White House trade adviser Peter Navarro said they are still planning to hold another round of trade talks with Chinese negotiators.

What about Bitcoin?

During the first week of August, just like gold, Bitcoin enjoyed an uptrend as well, going from around $10,000 to above $12,300.

However, since then we have dropped to $11,350 on Monday, with 24 hours loss of 0.70% while managing the daily trading volume of just $616 million. However, Bitcoin’s recent surge showed that the flagship cryptocurrency is moved by macro events.

The fact that “the correlation between Gold and BTC currently is about .8,” as noted by trader Cantering Clark means, if gold is going to go nuts, the leading cryptocurrency can enjoy a spike in price as well.

Clark further points out, “the move up in Gold is likely just starting as it is an indication of the current climate, ultimately this would be great for BTC.”

This would also help in determining if Bitcoin is becoming a true macro vehicle, and remains “more aligned as a risk-off asset.”

ATOM, DASH and More: Coinbase Considers Adding 8 New Cryptos

Per a blog posting from the exchange, Coinbase is exploring the addition of Algorand, Cosmos, Dash, Decred, Matic, Harmony, Ontology, and Waves. Currently, coins listed on its non-Pro interface include Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, USD Coin, XRP, Stellar, Zcash, 0x, Litecoin, and the Basic Attention Token.

Coinbase’s announcement follows new token listing guidelines posted last September. Per a follow-up blog post, Coinbase wrote: “Because listing announcements will become more frequent, we expect to publicly announce the addition of new assets only at or near the time of public launch across one or more Coinbase products.”

In other words, each of these products is very likely to be listed. The company is currently vetting each product based on in-house criteria. The exchange hopes to add some 90% of current coins on the market onto the exchange. The company’s guidelines act as a useful transition onto the exchange for customers, developers, and Coinbase.

Even if listed, coins may only be available in certain locations. Each coin will be subject to a case by case study based on jurisdictional conditions, the company said.

Brian Armstrong image via CoinDesk archives

Bitcoin Outshines Gold Amid Risk Aversion in Financial Markets

Bitcoin is outperforming gold amid heightened uncertainty in the global markets.

The world’s most valuable cryptocurrency is currently trading at $11,700, representing 16 percent gains on a month-to-date basis. Meanwhile, gold, the traditional safe-haven asset, has added 6 percent this month.

The precious metal picked up a bid at $1,400 on Aug. 1 as the U.S. President Trump’s decision to escalate trade tensions with China triggered a flight to safety. The S&P 500, a global benchmark for riskier assets, fell 0.90 percent on the same day.

The risk aversion worsened earlier this week when China began allowing the Yuan to depreciate beyond the major psychological level of 7 per U.S. Dollar.

As a result, the S&P 500 fell to a two-month low of $2,822 on Monday and gold extended gains to hit a fresh 2019 high of $1,510 yesterday. Interestingly, bitcoin also found takers near $9,900 on Aug. 1 and rose to a one-month high of $12,325 on Tuesday.

Bitcoin a safe haven?

Bitcoin rising along with gold during times of stress in the global markets indicates the top cryptocurrency is being accepted as a new safe haven, according to CNBC Host Ran NeuNer.

Further, the recent rise in the leading cryptocurrency coincided with a sharp uptick in the S&P VIX index – Wall Street’s fear gauge, as seen in the chart below.

  • VIX rose 10 percent on Aug. 1 and rose to a seven-month high of 24.81 on Monday. As of now, the fear gauge is seen at 17.75.
  • Bitcoin jumped from $9,900 to $12,325 in six days to Aug. 6. The rally seems to have stalled with the VIX index pulling back from seven-month highs.

Bitcoin does seem to have found some love as a safe haven if recent price action is anything to go by.

However, there is no long-run correlation between bitcoin, stocks and the US Dollar, as noted by prominent analyst Mati Greenspan.

In fact, gold and bitcoin have moved in opposite directions in the past.

For instance, BTC dived below the long-held support of $6,000 on Nov, 14, reviving the bear market which had come to a halt near that psychological support in five months to October. By mid-December, BTC was changing hands at 15-month lows near $3,100.

During the same time frame, gold went from $1,200 to $1,300 and further extended the rally to $1,346 (Feb. 20 high). Further, BTC remained in a bear market throughout 2018 despite the trade tensions between the US and China.

All-in-all, it is still too early to say that bitcoin has taken up the role of a safe-haven asset.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View