CEX.IO company blog | Traditional gold vs digital gold: what is the best investment now?

Comments by Yuri Mazur, Head of Data Analysis Department of CEX.IO Broker

First of all, I would point outthe need to diversify the investedcapital. The same investor can invest in both gold and bitcoin. If we talk directly about the choice between these two assets, then from a technical point of view, Bitcoin looks more attractive in the medium term than gold, because gold reached a historic high in August and is now in a correctional phase. Bitcoin is now still far from the historical high of December 2017 and is in an upward trend. At the same time, Bitcoin recently broke the important resistance level of $ 11,862, which opened up the opportunity for it to reach the milestone of $ 14,000.

there was a coronavirus pandemic. Judging by the situation in the world, the main economic blow fell during its first wave. Therefore, today a further decline in the price of gold is the most likely development of the price dynamics of this asset. Bitcoin is not a defensive asset to the extent that gold is, and tends to grow in favorable economic conditions. Therefore, with the global economy recovering over the next few years, Bitcoin is likely to be a more promising asset.

Also large purchases of this asset by MicroStrategy, Square and Mode Global Holdings PLC over the past two months sayabout the growing interest in bitcoin from institutional market players.And at the moment, these actions are the most significant fundamental driver of the growth of the value of bitcoin.

Upon breaking through the $14,000 mark on October 31Bitcoin experienced a correction due to profit-taking by buyers who opened purchase transactions after the BTC/USD pair broke through the resistance level of $11.862.

Now stagnating below 2019 highyears 13,949 dollars. In the medium term, a correction to $ 11,500 - $ 12,000 is likely, especially if the quote consolidates below the 50-period moving average on a four-hour timeframe.

After that, most likely, a new one will follow.consolidation around $ 12,000, during which market makers will generate new liquidity for further movement along the trend. When the necessary level of liquidity is formed, a new wave of ascent will follow, the main target of which will be $ 16,000. But further movement within the uptrend is likely to occur as early as 2021.

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