Bitcoin and 2011 Gold, any Similarities?
Bitcoins, ICO, Cryptocurrencies. Many titles in the media not even connected with the Financial World are screaming this to us from their front pages. That reminds me the situation on Gold from the 2011, when XAUUSD was heading higher and higher, gaining interest from the wider public. Buying Gold back them was trendy and was perceived as a great form of invest.
What happened after the 2011 we all know, the price declined and left the latest buyers with empty pockets. Is the current situation on the Bitcoin similar to that one on Gold in 2011? For me yes, especially when I look on the ATR and the volatility which in the past few months is significantly higher and is usually associated with the trend reversals.
So far we do not have any sign that the price of the Bitcoin should reverse but what I am trying to tell you is to be extra careful now as the market conditions are very similar to the times when reversals usually occurs.
Let’s come back to the traditional market and see the situation on Silver, where we bounced of an area where we had three important resistances crossing in one place. That worked and the price created a shooting star. Now we are defending on an up trendline and the lower line of the channel up formation. If this support will be broken, sell signal will emerge.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
