PAXG Bulls Seek A Return To $1,800

The FTX contagion continues to wreak havoc in a crypto market that has been trapped in a downtrend for most part of 2022, with tokens struggling with recovery. Despite the crypto winter, Pax Gold price has continued to display strength as bulls focus on attaining higher highs. 

Pax Gold Price Displays Strength As Other Coins Struggle

The crypto market has just entered the last month of the year. The year has been, to say the least, one of the most painful, particularly for those investors who entered the space after the 2018 bear market. If it is not the geopolitical effects of the Russian-Ukraine war, it is the collapse of the Terra ecosystem occasioned by the de-pegging of Terra’s stablecoin UST from its $1 value. 

Additionally, the increasing consumer prices and inflation rates have seen people take their money, not only from crypto but from stocks and cryptocurrencies to meet immediate needs. The latest blow to the crypto market came from the collapse of one of the largest crypto exchanges in the world, FTX early last month. The effects of this continue to be felt across the market and according to some leaders in the market, it has “taken the crypto space back several years.”

Social mood and investor sentiments remain low. According to data from Alternative, the Fear and Greed Index was in the “Fear” zone on Friday.  According to the sentiments and emotions analysis firm, the index is a step higher from the “Extreme Fear” zone that it has been stuck in for the most part of the last quarter, as shown by the red line on the chart below. 

Fear and Greed Index

Alternative says that fear can “be a sign that investors are too worried” and as such, they offload risk-on assets to get safer ones like gold. However, for crypto investors, the shift usually moves to stable assets backed by commodities such as gold, silver, and oil. 

What Is PAX Gold And Why Is It Rising?

Pax Gold is one of the cryptocurrencies that are fully backed by Gold. It is an ERC-20 token built on the Ethereum blockchain. PAXG is tradeable on several exchanges and has become one of the easiest ways for traders to invest in Gold. 

According to Charles Cascarilla, one of the creators of Paxos Standard (PAX), the team behind PAX Gold, PAXG was developed with an aim of making the precious metal more tradeable, as the physical stone is not easily divisible and flexible, especially when it comes to transport. 

For this reason, Paxos Standard decided to create a digital asset that is entirely backed by Gold. Details from the PAX Gold whitepaper reveal that the crypto was created to allow market participants to own very small amounts of gold through the altcoin, thus virtually eliminating minimum buy limits for the commodity.

 PAXG is backed by one fine troy ounce of a 400 Oz London Good Delivery gold bar stored in Brink’s vaults. PAXG token holders own the underlying physical gold held in custody by the Paxos Trust Company.

Gold is usually stable during periods of extreme price volatility. Even so, the Gold Index (XAU) is 13% below its 2022 peak reached in March. However, the economic volatility that has affected other markets in the past year has not affected gold as much. 

There have not been sudden changes in the value of Gold that the bearish conditions may have caused. Therefore, digital coins backed by physical gold are a relatively interesting form of asset that holds great promise as a favorite investment among risk-averse investors. 

As such, interest in this category of safe-haven investment has been increasing with the surge of demand. Pax Gold has maintained consistent weekly and monthly growth over the last six months. Its network has seen rapid growth over the same time frame. 

To put this into context, the Pax Gold blockchain has seen approximately 5,000 unique new addresses being added to the network over the past three months, according to data from CoinMarketCap. There is a total number of about 24,152 unique addresses that hold PAXG in the network as of December 2. This was a considerable increase from September 4, when there were just 19,154 distinct wallet addresses on the PAX Gold network. The ecosystem has about 13,000 unique addresses at the beginning of the year. This is a 13% growth over a period of 11 months.  

This has led to the growth in the price of gold-backed coins with the Pax Gold price increasing 14% over the last 10 days and 3% over the last two days. The altcoin’s market capitalization now stands at $581.5 million, up $0.93% on the day. 

The 24-hour trading volume has surged 14% to $11,972,365. This is an indication of the continued investor interest in cryptocurrency as it exchanges hands on various trading platforms. 

PAXG Escapes Out Of A Pennant Before A Run-up To $1,840

The price of the gold-backed token was pressed from both sides by the resistance and support lines of a pennant between November 11 and 30. This suggested that PAXG was consolidating as overhead pressure and buying pressure appeared to balance out.

This was validated by the Moving Average Convergence Divergence (MACD) indicator’s horizontal movement over the same period. Similarly, the moving averages were flattening out and the ARMS (TRIN) index was oscillating between the red and green lines, an indication that PAXG was in sideways price action. 

At press time, the Pax Gold price has escaped from the pennant, breaking above the descending trendline at $1,740, on Wednesday. Note that this is the same level where the 200-day simple moving average sat, an indication that the crypto now sits on relatively strong support. 

Therefore, increased demanding pressure from the current price could see PAXG rise to hit the optimistic target of the prevailing chart pattern at $1,840, a 3% ascent from the current price.

PAXG/USD Daily Chart

Supporting the Pax Gold price optimistic outlook is the buy signal from the Moving Average Convergence Divergence (MACD) indicator. This occurred yesterday when the 12-day exponential moving average (EMA) (blue line) crossed above the 26-day EMA (orange), suggesting that the market sentiment had flipped bullish. 

A day earlier, the 50-day SMA crossed above the 100-day SMA as shown on the daily chart. Though not a golden cross, this bullish cross-over points to increased demand for the gold token, adding credence to the positive outlook. In addition, the Arms (TRIN) index was positioned at 1.25, suggesting that there were more buyers than sellers in the market.

However, things may go awry for PAXG bulls if the price turns down from the current levels. For this to happen, Pax Gold sellers would need to overcome the immediate support at the 200-day SMA at $1,740 before exploring areas around $1,700 and $1,680, where the 50-day and 100-day SMAs are currently sitting. Meanwhile, any attempt to push the PAXG price to hit the downward target of the prevailing chart pattern at $1,633 (an 8% descent) may be hindered by resistance from the $1,650 psychological level.

Despite this bullish outlook for PAXG, the bearish conditions in the market are likely to continue in the near term. The FTX contagion continues and there is no telling how far the effects will reach. The macro climate continues to increase the headwinds leaving crypto investors with less portable projects to pump their capital into. 

As such, there are some interesting pre-sales that are currently going on in the crypto space with the potential to increase investors’ returns once they are listed on exchanges. An example of such crypto with an optimistic outlook is the IMPT token, whose presale is ongoing. The token has so far raised $13.5 million in the ongoing presale. As a bonus, the Impact Token team is running a giveaway promo of 100K. Hurry up and take part in this giveaway so that you don’t miss out on an exciting opportunity.

Similarly, Dash 2 Trade comes in as well among these promising tokens. This platform enables the creation and testing of trading strategies for traders and investors to make informed market decisions. Dash 2 Trade is designed to take your crypto trading to the next level by providing data-based crypto signals. The team behind D2T has so far raised  $7.7m raised with over 85% of the tokens sold in stage 3 of the presale. Don’t miss out on this opportunity to buy D2T at a discounted price as the price is set to increase to $0.0533 in stage 4 of the presale.

With a trading intelligence platform like Dash, looming disasters like the collapse of FTX can be spotted before they occur and help traders and investors to secure their assets and make market-beating returns. 

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