We step out of crypto for a moment.
Dow Theory – Principle 4:
"Indicators confirm each other"
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1. Previous Gold Movement
Gold experienced a strong rally recently after a clear accumulation phase, reaching a peak around 4380.
Afterward, gold faced a sharp decline, indicating strong selling pressure and the start of a corrective phase.
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2. Current Technical Analysis
From the current chart, we observe:
1. Point A1 formed at the reversal level of 3939.
2. Gold then retraced upward to form a new swing high, potentially preparing for A2.
3. The current scenario activates if there’s a drop with a daily close below 3885. In this case, the next support target is 3805.
4. There’s a strong support box below this level. If it breaks, the deeper target would be 3553, which aligns with the reversal point.
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3. Supporting Candlestick Analysis
The latest monthly candle shows a large upper wick, reflecting strong selling pressure.
This indicates sellers’ strength and favors continued downward movement in the coming period.
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4. Linking Gold and Bitcoin
If gold closes like this, it will be a strong negative signal for gold.
At the beginning of next month, we may see a short-term corrective rise in gold toward 4200, mainly to cover the displacement in the monthly candle.
After that, gold is expected to resume its decline toward 3800 to absorb liquidity from this area.
At the same time, according to Bitcoin analysis, we anticipate a new bottom formation at the start of the month.
When Bitcoin begins forming this bottom, gold will be in a corrective upswing before resuming its drop.
Liquidity exiting gold is likely to flow into global markets, including Bitcoin, which may support a Bitcoin rally after its bottom is established.
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5. Summary
Gold currently shows strong selling pressure and a clear bearish trend, with potential continuation if key support levels are broken.
Main support levels: 3805 and 3553.
Short-term, gold may experience a corrective rally to cover the monthly candle displacement, then resume its downward trend.
Bitcoin’s movement may be influenced by gold’s liquidity, with a bottom likely forming at the start of next month.
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Disclaimer: This is personal analysis. Your entry and exit decisions are entir
ely your responsibility.
Mohammed Al-Makhlafi, Crypto Lens
