Bitcoin bulls buy gold

Bitcoin bulls buy gold

2021-02-11 • Updated

What happened?

Bitcoin skyrocketed to a record high this week after Tesla announced it had made a $1.5 billion investment in the cryptocurrency. Cryptos are becoming more popular not only among traders, but also large corporations start showing their interest. By the way, Mastercard has uncovered its plans to let payments in crypto already this year. Apple claimed it would launch its own crypto exchange.

While some analysts believe gold will be soon replaced by crypto. We should admit that cryptocurrencies are highly volatile. Therefore, investors see gold as a way to hedge against this volatility due to its stability.

“If you’re into cryptos, you want to consider having some gold. Bullion “may act as a bit of a hedge against the volatility of cryptos,” said Newcrest Mining.

According to Goldman Sachs, gold and bitcoin can exist together. Even if crypto bites off some demand from the yellow metal, the precious metal will remain sought-after.

Technical analysis

Gold has been trading in a descending channel since mid-summer. This week it has gained due to the weak US dollar, but the upside is limited by the 200-day moving average of $1 850. If the price drops below the low of January 15 at $1 825, the doors towards the one-week low of $1 790 will be open. On the flip side, the breakout above $1 850 will push the price up to the 100-day MA at $1 870.

XAUUSDDaily.png

Unlike gold, BTC is up more than 50% in 2021. If it jumps above $47 000, the way up to the next round number of $50 000 will be clear. Support levels are at the recent lows of $39 000 and 37 000$.

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