Topping Bitcoin & Other Clues for Gold & Silver Investors

Another and perhaps final re-test of the neck level of the
head-and-shoulders pattern in the GDXJ is already behind us.

It looks like today’s session will be the third consecutive
day when GDXJ will close below the neck level of the pattern, thus
marking it as fully verified. Shortly after I wrote about this pattern as something that was likely to form.

This makes subsequent declines even more likely.

Please note how the technical indication from the GDXJ precedes the
technical indication from the GLD ETF, which is still sitting on its
rising support line.

There’s one more thing that the above chart tells us –
namely, it shows that GLD, SLV, and GDXJ are all declining despite a
small – but still – decline in the UUP ETF, which serves
as the proxy for the USD Index.

This is a subtle clue telling us that the precious metals sector is
ready to slide as soon as the USD Index rallies in a more decisive
way (yes, even despite silver’s exceptional fundamental situation). Right now, it’s still trading close to 100 without a
confirmed breakout above it – being at 99.69 at the moment of
writing these words.

Another clue comes from bitcoin.

The cryptocurrency corrected 38.2% of its previous short-term
decline, and it moved slightly above its previous high. It also
reversed on an intraday basis.

All this is important because, the last time we saw the 38.2%
retracement being reached, was at the January top in bitcoin, which
was also one of the local tops in the stock market. Moreover, the
most recent short-term top in bitcoin (the early-March one) heralded
short-term declines in the precious metals sector.

The implications for stocks and PMs seem bearish, but the fact that
the latter rallied after bitcoin’s January top might seem
bullish. In my view – incorrectly so. Back then, it was the
slide in the USD Index – the one that took it to its yearly
low – that triggered the final part of the upswing. Currently,
we have something opposite – it seems that the USD Index is on
the verge of a bigger move higher, as I discussed in my previous analyses.

Unlike 95%+ of investors, you are well prepared.

Much more follows in the full version of this analysis – in
today’s Gold Trading Alert. Check out the current promo – you’ll like it.

Thank you.

Przemyslaw K. Radomski, CFA
Founder
Golden Meadow®