Bitcoin dips under $53,000, Gold flat as dollar advances on rising Europe virus woes (With Trading Strategy)

Gold prices were steady on Thursday as support from easing U.S. Treasury yields was offset by a strong dollar, which emerged as a preferred safe-haven amid growing concerns about extended lockdowns in Europe.

The spot gold fell 0.02% to $1733.32 per ounce by 15:50(GMT+8) on Thursday.

The dollar hit a fresh four-month high to the euro on Thursday amid worries about Europe’s third COVID-19 wave and potential U.S. tax hikes.

U.S. Treasury yields dipped after the Treasury saw average demand for an auction of five-year notes, with the market appearing to stabilize after benchmark yields reached one-year highs last week.

Lower returns on Treasury bonds reduce the opportunity cost of holding non-yielding bullion.

New orders for key U.S.-made capital goods and shipments unexpectedly fell in February.

The timeline for when the Fed will start to raise rates will depend on what is happening with the economy, New York Federal Reserve Bank President John Williams said on Wednesday.

Chicago Fed President Charles Evans also said the central bank will not reduce monetary policy accommodation until it sees actual improvements.

Treasury Secretary Janet Yellen on Wednesday said U.S. banks look healthy enough to be allowed to pay dividends and repurchase stock.

Although Elon Musk says people can now buy a Tesla with bitcoin, bitcoin fell below $53000 on Thursday.

Bitcoin fell 2.52% to $52785.0 by 15:50(GMT+8).

As the Bitcoin correction deepens, the fear, uncertainty, and doubt has returned, with billionaire hedge fund manager Ray Dalio adding a whole bunch more of it.

In an interview with the founder of the $150 billion hedge fund Bridgewater Associates stated that there is a “good probability” that the U.S. government could ban Bitcoin just as it did with gold ownership in the 1930s.

That happened because government leaders at the time did not want gold to compete with fiat money and credit as a store of wealth, Dalio added.

“They don’t want other monies to be operating or competing because things can get out of control. So I think that it would be very likely that you will have it, under a certain set of circumstances, outlawed the way gold was outlawed.”

The billionaire hedge fund manager and philanthropist, who called Bitcoin “one hell of an invention” and compared it gold in January, pointed out that India’s government is already trying to ban Bitcoin and cryptocurrency trading in general. He added that he is not an expert but asserted that it can be tracked and the government can work out who is dealing with it.

However, there was a little light at the end of Dalio’s gloomy outlook when he acknowledged BTC has stood the test of time as an asset class.

“Bitcoin has proven itself over the last 10 years, it hasn’t been hacked. It’s by and large, therefore, worked on an operational basis. It has built a significant following. It is an alternative, in a sense, storehold of wealth. It’s like a digital cash. And those are the pluses.”

Don’t expect bitcoin’s wild swings to relax anytime soon.

That’s according to Ari Wald, head of technical analysis at Oppenheimer, who says the cryptocurrency’s highly volatile action isn’t going away.

“You need to be able to stomach that volatility. It’s there to stay,” Wald said Monday. “With the upside reward comes a lot of volatile day-to-day and even week-to-week action.”

Bitcoin fell nearly 3% on Monday after Federal Reserve Chairman Jerome Powell called cryptocurrencies primarily “speculative assets” and said the Fed was in no hurry to develop a central bank digital currency.

“Here’s something that can drop 20% and still hold all of its trend lines and support levels and leave the trend undisturbed,” Wald said. “Take for instance just the action last February. It made a high of about $58,000 and the next day was down to $44,000. It’s really been volatile and consolidating since then.”

Gina Sanchez, founder and CEO of Chantico Global and Lido Advisors’ chief market strategist, agreed with Powell that the crypto is not a great store for value, but also saw a different reason for its potential drop.

“As we reopen, ... as money moves away from speculative assets, out of the riskier assets and quite frankly into goods and services spending, I think bitcoin’s going to get hit,” she said in the same “Trading Nation” interview.

Bitcoin has climbed more than 840% since the March bottom.

Trading Strategy (source: Trading Central)

Pivot: 1741.00

Our preference: short positions below 1741.00 with targets at 1729.00 & 1725.00 in extension.

Alternative scenario: above 1741.00 look for further upside with 1745.00 & 1749.00 as targets.

Comment: a break below 1729.00 would trigger a drop towards 1725.00.

Supports and resistances:

1749.00

1745.00

1741.00

1734.00 Last

1729.00

1725.00

1719.00

51449 is our pivot point.

Our preference: rebound towards 56104.

Alternative scenario: below 51449, expect 49849 and 48897.

Comment: the RSI is below 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the price is trading above its 20 period moving average (52660) but under its 50 period moving average (54583).

Supports and resistances:

58026 **

57065 *

56104 **

55142

53134 last

52077

51449 **

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.