Well, well, well... What is going on with the world? Unemployment is still rising. Covid seems to gather strength in Europe again and prepping for a round 2. Can only imagine what that may mean for the US in a few more weeks. Every other analyst is calling for a major correction in the legacy markets. Yet, in reality, Gold hit a new ATH, Nasdaq hit one not too long ago, Silver is higher than it has been in years, alts are pushing up and now BTC has done something remarkable.
In a sense there is only one chart that is on everyone's mind right now. Last week I typed the words "unless BTC decides to surprise us here", meaning a break out of long term diagonal resistance. I am going to be honest though. Although technically a possibility, I wasn't expecting it. Like: at all. So I am not going to tell you I saw this coming.
We have a serious test of this resistance now. And I even used log. On linear it broke straight through and to be fair: I often use linear. And last week I was definitely still being a smarty-pants with my linear rendering of why BTC would definitely (maybe) go down before going up. Well, it decided it had no respect for my well worded arguments and broke straight up.
And I even had little red arrows... Such a waste of effort.
Now I had been calling for new ATH on Gold (which we got) and Silver doing well (which it is), so why not 'digital commodities'? Well, mostly because I figured Gold and Silver would benefit from the troubles in Hong Kong (lots of gold that is in private hands is stored in Hong Kong) and from the corona problems. However, I did not expect the legacy markets to hold up the way they seem to be doing. I have no idea how that can even happen, to be honest.
So, what is next for BTC? Well, the horizontal ranges are much more powerful than channels or diagonals, so I will be very surprised if we pass 11.6K anytime soon. Feels like I have said similar things before though. At the moment I am enjoying a nice holiday darting around Europe, while we still can. I am typing this while looking out over Lago Maggiore. There are worst places to contemplate the faith of the economy...
So with this view, I will finish my look at the markets for today. See you again next week.
As always, I encourage you to trade safe, trade responsibly and wear a mask when you go outside! Well, not outside, but anywhere inside that is not your own house... You get my point.
AN EDIT PS: There is one interesting chart to keep an eye on that may explain the fact that 'assets' of many classes still rise against the dollar. That is the declining value of the dollar itself. Or the DXY. Here is the chart.
If it gets to that target box, we may see a bounce. It might be very aggressive or just a relief bounce. Of course, lots depends on the outcome of the US elections, trade talks with China, etc. Something to keep an eye on. That said, global markets seem to follow the USD developments, even if they use EUR or other currencies. They are all still interconnected of course.
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