The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 01.03.2021
The bearish momentum in the markets is making any kind of movement higher extremely difficult as you can see. Bitcoin has continued to move lower below the $46,000 and even reached the $43,000 before staging a small comeback, signaling that the negative pressure is not overall yet. EURUSD and Gold are also experiencing negative pressure as the U.S. stimulus package gets approved as the rally in the stock market is going to have a negative impact on the instruments.
With that said, let’s find out how the markets are doing on March 1st, 2021.
The negative pressure that we’ve witnessed on Bitcoin has not let up one bit. The movement continued lower to reach the 200-SMA (Simple Moving Average) on the 4-hour chart, however, once the instrument reached the mentioned level the Bulls decided that this was enough negative pressure and found a way to push the instrument higher. Currently the $47,500 is acting as the barrier for the Bulls should they wish for more upside movements.
The bearish pressure that we’ve witnessed on the EURUSD has continued to be the main driver of the instrument. However, it seems that it has reached a bottom around 1.2065 as it bounced slightly from that level. Breaking below all three SMAs (50, 100, and 200) has all but cemented the bearish momentum on the currency pair with the cluster trading between the 1.2100 and 1.2125. As things stand, the instrument will have more downside pressure mounting as the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are showing.
More negative pressure is affecting gold as it continues to fall reaching a new multi-month low at the $1,720. However, since the fall was so rapid falling below the $1,760 all the way to the mentioned low in the span of 4-hours, the instrument is currently attempting a comeback as it makes its way towards the $1,760. The Bulls are in desperate need to make a clean break above that level as failing could mean another bout of negative pressure that sends the instrument below the $1,720.
What’s the strategy you’re going to use when it comes to trading these markets? Will the negative pressure continue to dictate the movement of the markets? Or will we see enough bullish momentum to combat this downward pressure?
Whatever you choose to believe, you can react to it all on CryptoAltum. Go ahead and register a trading account right here if you don’t already have one.
Bitcoin Recovers Above $45,000
We had mentioned in our Friday’s brief how Bitcoin was at risk of dropping below the $45,000 support level, and unfortunately that came to fruition as the instrument broke the mentioned support to reach the $43,000 level which is also below the 200-SMA on the 4-hour chart. However, it would seem that the break below the SMA spooked the Bulls so much that a move higher was made back above the $45,000, but the negative pressure still remains
Any movement higher by Bitcoin will encounter heavy resistance as there seems to be multiple levels between the current level of Bitcoin and the chance to establish another bullish trend. The first resistance level was seen around $47,500 as BTC attempted to break above it on Friday of last week multiple times and it wasn’t able to stay above it which resulted in the increase of bearish momentum. The RSI is printing around the 45-level which might not really express much, but with the MACD moving averages below the midline, this tells us that the negative pressure is still there although with not much momentum as before.
For now, the instrument will have to break above the $47,000 and the $48,000 resistance levels with the major level at $47,500. Breaking above those levels would mean that the bullish momentum will have enough room to stage a decent comeback. On the other hand, the current low at $43,000 is acting as the major support, below which the $42,000 will come into play.
Current Market Sentiment: Bearish.
EURUSD Continues to Fall
The instrument has been moving lower ever since it climbed towards the 1.2240. The movement lower was so intense that it fell below all three SMAs but once it reached the 1.2065, the Bulls were able to keep that level in check. Looking at the weekly chart, we can notice that the currency pair formed an inverted bearish hammer which in turn confirmed the bearish pressure. Furthermore, the $1.9 trillion U.S. stimulus package is gaining some ground which is putting added negative pressure on EURUSD.
The economic calendar for today will have the German CPI (Consumer Price Index) which is expected to show an increase in the living expenses in said country. Should the figure come in lower than expected, it could help draw focus on the dovish stance that the ECB (European Central Bank) has taken. All of this comes at a time when there are signs that the FED might be switching their stance from a dovish one to a hawkish one, which increases the bearish pressure.
However, the EURUSD might find some decrease in the bearish pressure if there’s some rhetoric from the ECB about continuing bond purchases to keep the rally in government bond yields. The main focus to the top side comes at the cluster of SMAs between the 1.2100 and 1.2125, as the instrument will have to break above that in order to have a semblance of bullish pressure. Should that not be the case, breaking below the 1.2065 becomes a bigger reality.
Current Market Sentiment: Bearish
Gold Focuses on $1,760
During the early portion of the European session, gold had managed to climb higher after reaching a low of $1,720. The Bulls were able to break the bearish pressure and start a correction higher with the instrument trying its best to stay above the $1,750, while it looks towards the $1,760 to have some solid ground on which to stage another move higher. This move higher came on the back of a softer tone that is surrounding the USD, this soft tone is due to the decreasing U.S. Treasury bond yield.
Meanwhile, the pace of vaccinations against the COVID-19 virus in the U.S., and global, has been nothing short of impressive, as well as the massive progress in Biden’s $1.9 trillion stimulus package, has led to a fresh increase in the U.S. stock market, which in turn kept a lid on any gains on the precious metal. The U.S. House of representatives have indeed passed the stimulus package which might see a fresh decrease in the price of gold as more information is dispersed about the schedule of this package.
With all these factors combined, the most prudent move at this point in time is to make sure that the instrument does manage to break above the $1,760 resistance level before confirming that the downturn has officially ended. Most investors will be looking towards the release of the U.S. ISM Manufacturing PMI (Purchasing Managers’ Index) to figure out what the short-term movement will be like.
Current Market Sentiment: Bearish.
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