Bitcoin, S&P 500, Gold, Technical Analysis, Retail Trader Positioning – Talking Points
- Bitcoin may resume rally as short bets accumulate
- The S&P 500 may also follow a similar path higher
- Gold prices weakening, but recent uptrend holding
In this week’s session on IG Client Sentiment (IGCS), I discussed the outlook for Bitcoin, the S&P 500 and gold. IGCS is typically a contrarian indicator. For a deeper dive into where these assets may go, including a deeper discussion of technicals and fundamentals, check out the recording of the session above.
Bitcoin Sentiment Outlook – Bullish
The IGCS gauge implies that roughly 77% of retail traders are net long Bitcoin. Exposure to the downside has increased by 5.49% and 15.08% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse higher despite the fact traders remain netlong.
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Bitcoin Technical Analysis
Bitcoin’s remarkable journey higher over the past couple of months is facing the 78.6% Fibonacci extension at 23813 on the daily chart below. Further upside progress may be met with negative RSI divergence, an ominous sign of fading momentum that could threaten a turn lower towards support.
BTC/USD Daily Chart
Bitcoin Chart Created in Trading View
S&P 500 Sentiment Outlook – Bullish
The IGCS gauge implies that about 39% of retail traders are net long the S&P 500. Upside exposure has decreased by 2.16% and 11.66% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.
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S&P 500 Technical Analysis
S&P 500 futures have turned lower recently after stopping short of the 38.2% Fibonacci extension at 3737. This also follows negative RSI divergence, warning that further losses may be in store. A break under the 20-day Simple Moving Averaged (SMA) could open the door to testing the 50-day one.
S&P 500 Futures Daily Chart
S&P 500 Chart Created in Trading View
Gold Sentiment Outlook – Bearish
The IGCS gauge implies that about 82% of retail investors are net long gold. Downside exposure has decreased by 7.17% and 23.10% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bearish contrarian trading bias.
Gold Technical Analysis
Following recent losses, gold prices remain in a short-term uptrend from late November, supported by a rising trendline. XAU/USD struggled to hold a push above the 50-day SMA after taking out the 20-day one. A fall under the latter may open the door to extending losses.
XAU/USD Daily Chart
Gold Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from December 23rd Report
— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
