JinDao_Tai

Fundamentals First: Why is Gold Falling While DXY is Too?Normally, gold and the U.S. dollar share an inverse relationship (which means, when DXY weakens, gold rises). But recently, this correlation has broken down, and that divergence is a loud macro signal.What’s Happening:Trade Deal Optimism: Headlines suggest the U.S. is nearing a resolution with China and other partners. With reduced geopolitical tension, investors are reallocating from safe-haven assets like gold into risk-on trades like equities and crypto.Iran-Israel Ceasefire: The temporary cooling of conflict has revived risk appetite. Traders are rotating out of war hedges (like gold and oil) and into tech, growth, and EM plays.Real Yields Still Elevated: Despite a softening Fed narrative, U.S. real yields remain positive, keeping pressure on non-yielding assets like gold. The fact that gold couldn't rally even as the 10-year note softened post-Moody's downgrade could be telling.My Perspective:This is the first clear signal in months that geopolitical hedging may have peaked. When gold decouples from its safe-haven narrative despite macro uncertainty, that often precedes a structural rotation phase, especially if institutional flows favor equities.Technical BreakdownGold has broken below its 50-day SMA at $3,322 and is trading in the lower third of its 3-month range. While the daily candles show increasing selling pressure, especially on lower highs (a sign of weakening bullish momentum)RSI: Falling toward 40, with no bullish divergence yet.Support Level: $3,176: Previous swing lowResistance Level: $3,444: previous swing highWhat This Move Might Be Telling UsWhen gold sells off on dollar weakness and geopolitical calm, the market isn’t just relaxing. It is rotating. The de-grossing of gold-heavy hedges: Some hedge funds may be taking profit on gold-heavy exposure from Q1’s rally.Rise of risk appetite despite cracks: Markets are forward-pricing trade peace and earnings resilience, possibly too early. Gold might not be in trouble, but it’s on the bench. Unless something reignites fear (e.g., Fed policy mistake, Middle East flashpoint, or economic shock), capital may stay elsewhere.

Currently, Bitcoin (BTC/USD) is trading around $104,800. Up slightly but still digesting a sharp reversal that rattled short-term bulls.Recent Price Action: Rejection From $112KBack on 22nd May, Bitcoin surged to a new high near $112,000, fueled by bullish momentum, institutional flows, and strong on-chain accumulation. However, that breakout was swiftly rejected, and BTC fell as low as $103,400.This kind of "bull trap" reversal highlights a few key dynamics:1) Overextended sentiment: The rally above $110K was not supported by volume or follow-through, suggesting exhaustion.2) Profit-taking by large holders or institutions likely triggered a cascade of stop-losses, accelerating the decline.3) Liquidation clusters in leveraged long positions likely exacerbated the drop.Bitcoin is now attempting to reclaim stability around the $104K–$105K range.🔍 Technical Snapshot- Support Zones at $103,000 and $93,200- Resistance Levels at $112,000 (ATH)Price is still above the 50 & 200-day SMAs, which could be a bullish longer-term signal.In addition, the price remains above the upper band of the cloud, but momentum is stalling. A decisive bounce off the cloud could reignite bullish sentiment. Or falling into the cloud could trigger more uncertainty and downside.Macro tailwinds: Concerns over U.S. fiscal stability and potential Fed rate cuts could keep Bitcoin attractive as a non-sovereign asset.📈 Projection ScenariosBullish Case:If BTC consolidates above $107K, we could see another attempt and retest of $112K.Bearish Case:Failure to hold above $103K could see Bitcoin revisit $100K, and if that breaks, downside opens toward the $93K level. 🧭 Insight & TakeawayThe current reversal serves as a healthy reminder that no trend goes up in a straight line. Especially not in crypto. It likely shook out overleveraged longs, reset sentiment, and may give the market room to breathe before the next leg up.The long-term trend remains intact, but expect more volatility before any clean break to new highs.Always DYOR and DYODD and manage your risk.

In the earlier analysis, the expectation is for DXY to trade slightly lower to the round number level of 100. With Gold's inverse relationship with the US Dollar, anticipating further downside for the DXY should mean that we expect to see some upside on XAUUSD.However, the current price action on Gold is still signalling further downside.The good thing is that the price is approaching the support area where the 3200 price level and the 61.8% Fibonacci retracement level align. Look for a reaction in this area, for a possible rebound to the 3320 price level. Alternatively, if the support area is broken, there could be further downside to the 3000 price level.

As Gold approaches the 2600 level, I'm anticipating some volatility around this resistance level before a continuation higher.FED cutting rates this week could push gold higher, especially if we see the DXY lose ground.However, volatility is could be high, with choppy price action around this resistance level. Look for short term upside scalps or to buy on retracement.

ETHUSD has been trading within the range of 2526 to 2826 since early August.Currently, as BTCUSD spiked lower, it seems to have dragged ETHUSD down with it. (also likely due to the current recovery in strength on the DXY)Similiar to the BTCUSD, there could be a brief consolidation/retracement on ETHUSD before a continuation lower to the 2300 price level.However, if the price retraces back into the previous range, ETHUSD could again be stuck in the August range.

BTCUSD has quickly reversed from the 65,000 resistance area, which was tested on Monday this week.This move lower is not due to any major news but likely due to technical levels and its correlation with the DXY.A recovery in strength on the DXY traditionally leads to downward pressure on risk assets like cryptocurrencies.Today, the reversal broke through the 62,000 price level which coincides with the 23.6% Fibonacci retracement level. Further downside can be anticipated with BTCUSD currently trading just under the 60,000 price level.However, it is likely that the price could consolidate/retrace briefly before the continuation lower, with the next key support level at 55,000 (61.8% Fibonacci retracement level)

Currently trading just under the 2475 price level, with the US CPI due to be released laterLook for possible downside on the DXY which could, due to its inverse relationship, drive gold higher.If the price breaks above the 2480 price level, the next resistance would be at 2500 as a round number and psychological barrier.

Timeframe: H4 Trend: Continuation of the downtrend since 7th June 2024. Support/Resistance: If BTCUSD is resisted by the 23.6% Fibonacci retracement level at 61718, the price could continue trading lower. TSRI MACD: No crossover to signal selling opportunity yet. But MACD line converging with volume (histogram) decreasing. Next key support is at 56847

Highlighting the inverse relationship between the DXY (yellow line) and the BTCUSD. Potential weakness on the DXY tonight could see the BTCUSD continue its bounce from the support level of 66,000 (also formed by the 38.2% Fibonacci retracement level from the longer term) up toward the previous high of 72,000. If the price breaks above the resistance level, significant upside could be anticipated with the next target profit level around the 74,500 area

Upcoming buying opportunities for BTC With the price having broken down from the 200-day Moving Average (200MA) and the Relative Strength Index (RSI) turning down from the overbought level, the price action on Bitcoin is signaling increasing strength for a possible reversal. However, to continue trading significantly lower, BTCUSD would have to break through the price area of 51,000 and 56,000. And beyond that, it could open further decline towards the support level of 40,000. Another perspective could be to view the identified price levels as hurdles which the BTCUSD could bounce, presenting good value entry positions for long term investors. Buying opportunities on BTCUSD: 56,000 to 51,000 price area (short term 50% & 61.8% Fibonacci retracement level) 40,000 price level (long-term 61.8% Fibonacci retracement level)