Gold (XAU) has jumped to its highest price in over seven years, after a blazing few days for the precious metal that is often considered a safe haven asset. In the process, it has left our Bitcoin (BTC) far behind in the dust, languishing still under $7,000; but Bitcoin continues to hold key levels and could follow gold up at any time.
Starting on the weekly chart, we can see that gold is within striking distance of its all-time high, which was achieved between 2011 and 2013. Gold had already been trending up before the COVID-19 pandemic became widespread and started affecting the global economy significantly. Thus, we can probably expect some slowdown in price rise around the resistance zone, even if it is eventually broken within this long term uptrend.
Looking at gold versus Bitcoin, we can see that Bitcoin has not (yet?) stepped into its role of safe haven asset at this time, despite keeping up with gold for a while. With governments printing historically unprecedented amounts of money to keep economies floated, gold is clearly stepping into this role of safety as a low-inflation asset.
But critically, Bitcoin is holding key levels that can serve as a platform to move up from here. If we look on a daily Bitcoin chart, both the 21 EMA and late 2019 support are being intensely guarded with an aggressive buy wick coming in yesterday to keep price closing above those levels.
This means that there is nothing yet on the charts to indicate that Bitcoin could not follow gold up soon. One of Bitcoin’s primary value propositions, after all, is its low-inflation supply, which attribute it shares with gold and is likely driving gold’s climb.
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