The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 09.03.2021
The market continues to be led around by the current developments in the U.S. Treasury yields and appears to be trying its best to decouple from it. Bitcoin has managed to break above the $52,000 resistance level in what was a very bullish move, but the commitment of Bulls will be tested as the instrument targets $55,000. EURUSD fell to a four-month low before recovering a bit especially with the current drop in yields and the Chinese intervening in the market.
Nevertheless, gold finds itself in the same boat at EURUSD, as it also fell to a nine-month drop, before climbing higher with hopes of breaking above the $1,706 to cement a bullish momentum.
With that said, let’s find out how the markets are doing on March 9th, 2021.
We’ve spoken about how Bitcoin was able to break above a group of SMAs (Simple Moving Averages) and managed to settle above the $50,000, and attempted to break above the $52,000. However, the failure of pushing the instrument lower a bit broke the $50,000, but didn't last as the Bulls quickly rallied to the rescue of the instrument and managed to push higher while extremely well breaking through a couple of important resistance.
The movement was suspicious concerning showing itself, but now we have our answer; the next target for BTC seems to be at the $55,000.
It shouldn’t come as much of a surprise to market participants that the common currency, EURUSD, had continued to manifest the bearish pressure. The movement lower came in after some disappointing data from the EU and the overall U.S. Treasury yield rise that has been happening lately.
EURUSD broke below the 1.1900 and continued to move even lower, without much of a support to hold it steady. The instrument reached a bottom of 1.1835 with extremely negative RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) before a small recovery was made.
We had discussed how gold has been in quite a bearish move from the beginning of the year, and it seems that the instrument hasn’t yet managed to kick that momentum aside as the economic and inflationary scene continue to push gold lower. The instrument has recently broken through the $1,700 support level after it attempted to rally above the $1,715 resistance, in hopes of stopping the Bears in their tracks. So, gold continued to move lower reaching the $1,685 support level before there’s some movement higher.
What’s the strategy you’re going to use when it comes to trading these markets? The current trajectory of the markets will continue to play an important role in today’s market, or will we see a correction decent enough to jeopardize the movement?
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 Breaks $52,000
The movement in Bitcoin can only be described as volatile. One moment we’re thinking that the instrument doesn’t have enough momentum to rechallenge the above levels, and the next we are seeing it break through them all. The instrument has managed to break above the $52,000, which caused it some trouble yesterday forcing BTC to drop below the $50,000, however, that was only for a moment before the Bulls took and pushed the instrument higher above $52,000, and now turns its attention to the $55,000 resistance level.
Looking at the technical indicators, specifically the RSI and MACD, we can notice that the movement higher might be in trouble, yet we’ve been burned by BTC before. The RSI is printing well above the 70-level, which usually indicates that the momentum has entered into overbought territory, i.e. there might be a move to the downside soon in order to correct the runaway movement.
However, when you take a look at the MACD, it shows a different story. With the moving averages above the midline and the histogram printing in the green, giving the impression that the positive momentum is here to stay for the time being.
Should there be any correction to the movement higher, there’s plenty of support on the downside to keep the bullish momentum intact. The first level lies at $52,000, with $53,000 before it acting as a minor support for any downward movement. Breaking below the $52,000 could put the upside movement in some trouble as the $50,000 would come into play and that would mean erasing all the gains that BTC made over the past couple of days.
Current Market Sentiment: Bullish.
EURUSD Manages to Recover
EURUSD reached a four-month low, a level not seen since November of 2020. The instrument continued to move with bearish pressure until it reached the 1.1835 level, however, with the U.S. Treasury yields pulled back, EURUSD managed to recover a bit towards 1.1860. But, that’s not the only piece of news that is moving markets, as the Chinese are intervening in the stock market in order to prevent any further declines and that is also aiding the common currency.
This movement upwards is very likely to be short-lived, though. Analysts are looking into the movement pattern of the U.S. Treasury yields and they are seeing that there’s still some room for another upward move. This will most likely add to the negative pressure that EURUSD is facing.
According to one analyst, bond yields should be above 3% according to a certain metric that involves the U.S. GDP and German bond yields. This only serves to push the instrument that much lower. Adding fuel to the fire is the slow roll out of the vaccine and the forced lockdown in the Eurozone.
Looking ahead, the economic calendar for the day shows that EURUSD will most likely be reacting to the German Trade Balance for January, the Eurozone Gross Domestic Product, and the Employment Change Data for the fourth quarter of 2020. Technically speaking, the EURUSD might see a decent move higher as the RSI is printing well below the 30-level as the MACD shows some decrease in the negative momentum as per the increasing red histogram.
Current Market Sentiment: Bearish.
Gold Hits Nine-Month Low
The negative momentum has continued to impose itself on the precious metal gold. The instrument continued to fall below the $1,700 and reached a nine-month low at $1,675. It was then that the Bulls were able to keep the negative momentum for taking over completely and managed to push the instrument towards the $1,700. However, it seems that despite the gallant effort of Bulls, Bears are simply too powerful at this point. The Chinese intervention in the stock market, which we mentioned earlier, has helped the Bulls elevate the risk-sentiment in the market and give Bulls some rope to hang on to.
Bulls aren’t out of the woods just yet, as the USD could easily regain some momentum to the upside if the market seeks that the risk-sentiment is changing from taker to averse, especially if the U.S. Treasury yields begin to rise once more.
The focus of the markets will also be taking into consideration the imminent vote today by the U.S. House of Representatives on the Senate’s $1.9 trillion stimulus package. Yields will continue to be the main driver of the yellow metal as the U.S. lacks any tier one economic data for the day.
Looking at the resistance and support structure of gold, we can notice that Bulls will have a tough time breaking above the $1,695 as seller presence between that level and $1,700 will be highly concentrated. Bulls will most likely aim for a clean break above $1,700 and target $1,706 which will be the ultimate challenge for Bulls. Any movement higher, the momentum will seek to break above the $1,715 as it would mean a clean slate on which Bulls can build their momentum on.
Current Market Sentiment: Cautiously Bullish.
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