The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 12.02.2021
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It would seem that the markets have continued to trade in their respective ranges, with spikes on each side to keep things a bit interesting. After Bitcoin managed to set a new All-Time High around $48,900, the selling pressure around that level caused the Cryptocurrency to fall right back below $48,000. EURUSD continues to trade in a very tight range, however the current technicals are showing that there’s some bullish pressure at play. Meanwhile, Gold’s fall below seems to be losing momentum as the precious metal waits for some guidance from the U.S. Stimulus package.
With that said, let’s find out how the markets are doing on February 12th, 2021.
Market Recap
Bitcoin’s bullish behaviour hasn’t ended just yet as we explained in our previous brief. The instrument managed to push higher after the corrective drop towards the $44,000 support level, from there another bullish move was established seeking the $48,200 resistance level. However, despite it marking a new All-Time high at $48,900, there was enough selling pressure to push Bitcoin back below $48,000 as it currently trades around $47,000.
The bullish momentum that was present on EURUSD, seems to have simply been taking out but the 1.2150 resistance level. Ever since the instrument reached the mentioned level, it has been consolidating the gain is made around 1.2130. However, we can’t say that the bullish momentum has been completely eradicated as the instrument still trades above the 100-SMA (Simple Moving Average) on the 4-hour chart and the RSI (Relative Strength Index) is prints between the 60 and 70 level indicating that some room was made for another move upwards.
The precious metal was confronted by increased bearish pressure after it failed to break above the $1,850 resistance level. Gold fell back below the 100-SMA on the 4-hour chart and currently trades around $1,825 as it seems to be keeping the bearish pressure from completely removing the gains. The RSI is showing the bearish pressure in action as it prints at the 40 level indicating that there might be enough room to the downside should the support zone around $1,820 and $1,815 break.
What’s the strategy you’re going to use when it comes to trading these markets? Will the break in consolidation lead to more directed movements? Or will there be more of the same swinging patterns?
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Bitcoin Battles Against Bears
The move towards the $44,000 provided Bitcoin with the needed bullish momentum to start a move back higher. The momentum was powerful enough that it helped BTC break above the $46,000 resistance level and even reach above the $48,000. The price managed to carve out a new all-time high at $48,910. However, it seems that the selling pressure was too much forcing the instrument back below $48,000.
On the downside, the initial support for Bitcoin can be found around $47,200. Below that, the $47,000 level will be playing a key role in keeping the bullish momentum alive in order to attempt another move higher. On the upside, the $48,500 region is a short-term resistance. The next key resistance might be near the $49,400 level. The overall price action suggests that bitcoin bulls might aim for a test of $50,000 in the near term.
The current risk that Bitcoin is facing is a move to the downside, should there not be enough bullish momentum to continue higher. The first major support is near the $47,000 level and the triangle lower trend line. The main support is now forming near the $45,000 level, any more losses could open the doors for a drop below the $44,000 support in the near term.
Current Market Sentiment:Cautious But Bullish.
EURUSD in Tight Consolidation
For the time being, the EURUSD has been caught in a 40 pip consolidation range without much change. This has been happening since Wednesday’s early European trading hours. While the upside has been capped around 1.2150, the Bears have failed to push the pair below 1.2110. A breakout/breakdown from the newfound range would open the doors for at least a 40-pip bullish/bearish move. A move above 1.2150 would expose resistance at the Jan. 22 high of 1.2191. On the flip side, a break below 1.2110 would shift risk in favor of a drop toward 1.2050.
Examining the RSI on the 4 hour chart, we can notice that the indicator has dropped back below the 70 level indicating that the instrument is no longer in the overbought zone. Furthermore, the indicator is printing between the 70 and 60 levels indicating that the bullish momentum has yet to be done for and that gives more credibility for another push to the upside.
Germany’s consumer prices could overshoot the European Central Bank’s (ECB) target by the end of this year, courtesy of a hike in taxes, the ECB Governing Council member and Bundesbank President Jens Weidmann said Friday. However, EUR/USD wasn’t really paying much attention to that, as it keeps its range around 1.2125.
Current Market Sentiment: Consolidation.
Gold Eyes U.S. Stimulus
Gold prices fell just under 1% overnight, as better-than-expected jobless claims data appeared to diminish the argument for additional fiscal support. That being said, with House and Senate Democrats filing joint budget resolutions that will allow President Biden to pass the majority of his proposed $1.9 trillion stimulus package, Gold’s downturn could prove short-lived.
The Federal Reserve’s dovish stance, and falling real rates of return, are also likely to underpin bullion. Fed Chair Jerome Powell reiterated that it is extremely unlikely that the central bank “even thought about withdrawing policy support” in the foreseeable future. The upcoming economic agenda is fairly light, with consumer sentiment out of the U.S. a notable highlight.
From a technical perspective, Gold is looking to extend its rebound from its lowest levels in two months, as price remains constructively perched above range support at $1,815 – $1,825. However, with price still tracking below the sentiment-defining 200-SMA which is currently seen at $1,855, and the RSI is travelling below their respective neutral midpoints, further losses are hardly out of the question. Nevertheless, a daily close above the 55-SMA which is currently seen at $1,854 would probably pave the way for prices to make a run at the psychologically imposing $1,900 mark. Clearing that brings the yearly high $1,959 into focus. Alternatively, a convincing push back below $1,815 could trigger a retest of the monthly low $1,785.
Current Market Sentiment: Consolidation.
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