Many people would have expected to see XAU/BTC flip in favor of gold due to Bitcoin's recent price drop. Interestingly enough, this trading market's sentiment has not changed in the slightest, primarily because gold has lost some momentum as well.
XAU/BTC Remains in Favor of Bitcoin
When the Bitcoin price drops by roughly $600 in very quick succession, the overall impact on trading pairs is often spectacular to watch. As far as XAU/BTC trading is concerned, there appears to be some minor relief for those bullish on gold, although it will not necessarily last long. For now, the overall ratio remains between 0.178 and 0.18, and none of the technical indicators have shifted in a meaningful way.
Bollinger Bands: Similar to yesterday, the Bollinger Bands - on the daily chart - remain relatively narrow. Despite a minor uptick in XAU/ BTC in favor of gold, the overall positive sentiment has already quieted down for the most part. There was some quick money to be made by active daytraders, but overall, no real change has occurred as of yet.
Now that any sort of uptick has been negated for the most part, it seems unlikely that any real volatility will occur. For now, neither gold nor Bitcoin show any signs of moving up or down by much, thus the status quo of the market can be resumed with little effort. Those who chase quick profits may want to keep a closer eye on the hourly XAU/BTC chart, albeit it is a risky game.
Moving Averages and RSI: No real momentum for the moving averages to speak of right now. The MA200 remains flat, with the MA20 still below it and running in parallel. As far as the MA50 is concerned, it is still sloping down and looks to cross the MA200 by the end of this week.
In the RSI front, the downward slope has been broken, but only ever so slightly. Considering how XAU/BTC is still down by over 1% for the day, it seems unlikely that there will be any decisive change as far as the RSI is concerned. That is not necessarily a bad thing for those looking to swap between Bitcoin and gold at a lower ratio.
The Sudden Gold Price Drop
Even though the decrease in Bitcoin value should have been beneficial to gold in this particular trading pair, that is not the case. More specifically, the gold price itself has gone through a bit of a rough spell. A drop to $1,715 is not overly spectacular, but it is sufficient to negate potential gains in the XAU/BTC pair. It is possible that the recent announcement by Pandora A/S to rely more on recycled precious metals has something to do with it.
It is the second time that the gold price will test its support level near the $1,707 range in quick succession. If it is not broken, a new push to $1,730-ish will materialize fairly soon. If this level gives way, however, there is nothing preventing a dip to the $1,690 range or even $1,678.