Fractional Gains in Gold Indicate Solid Demand | The Gold Forecast

Fractional Gains in Gold Indicate Solid Demand

May 15, 2019 - 5:59pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Bitcoin to Backfill? - by Joseph M. Wagner II

Today as of 4:00 PM EDT Bitcoin is trading up $450 nearly 6%. Futures trading Volume is still at historic levels and all seems clear for takeoff, but based on a technical rule BTC may be destined for a price dip back to $6500. This rule is known as backfilling. Filling the gap is witnessed when prices trade to their pre-gap levels. Gaps in BTC futures reflect the price change that occurred in the cash market is inactive.

That is not always the case in all markets this gap could be the beginning of a breakaway gap. StockCharts explains this type of gap as, “Breakaway gaps are the exciting ones. These occur when the price action is breaking out of a trading range or congestion area. To understand gaps, one has to understand the nature of congestion areas in the market. A congestion area is just a price range in which the market has traded for some period of time, usually a few weeks or so. The area near the top of the congestion area is usually resistance when approached from below. Likewise, the area near the bottom of the congestion area is support when approached from above. To break out of these areas requires market enthusiasm, and either many more buyers than sellers for upside breakouts or many more sellers than buyers for downside breakouts.”

Although today’s price action looks as though BTC is consolidating at $8000 I would be hesitant to view this as forming a base. This may be good news for traders who may have missed this most recent price advance as it will afford them the ability to buy on a dip as long as this is not a breakaway gap before taking out current resistance at approximately $8500.  

 

 

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