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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 12th March 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 12.03.2021

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The market seems to be adjusting, as the instruments try to maintain some semblance of bullish pressure. Bitcoin is staring down the barrel of a double top pattern which can cause a correction towards the $50,000. EURUSD is also facing increased bearish pressure with the positive news coming from the U.S. and negative ones from the Eurozone. Although, gold faces the same negative pressure as the U.S. 10-year yields continue to increase with positive comments coming from Biden on vaccination progress.

With that said, let’s find out how the markets are doing on March 12th, 2021.


Market Recap

Bitcoin’s performance has become somewhat shaky as of the past couple of days. While the movement higher has been able to break through important resistance levels 

It seems that the instrument might be losing any remaining steam, after being rejected by the $57,400, the instrument fell towards the $54,000 which we mentioned would act as a strong rallying point for Bulls, and the result was another move higher hitting $58,110 before falling back.

EURUSD was waiting on the ECB to deliver their decision on the interest rates and followed closely by the speech by Christine Lagarde. The reaction to those two events was highly positive as the instrument broke through the 1.1940 resistance level and even broke above the 50-SMA (Simple Moving Average) on the 4-hour chart, reaching a high of 1.1990 before correcting lower. This movement higher is giving the Bulls added confidence in the ability to reach above 1.2000 once more.

The RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) reveal just how powerful the movement higher really is, but it might be losing some steam.

Breaking above the 50-SMA on the 4-hour chart and reaching the high of $1,740, gold was feeling the bullish pressure. However, reaching that resistance, and the falling from there caused the instrument to test the 50-SMA once more around $1,715. Dropping below that level would mean that the negative pressure is mounting back up on the instrument. Thus, both the RSI and MACD are showing the mentioned decrease in the momentum of the instrument.

What’s the strategy you’re going to use when it comes to trading these markets? Has the correction ended and was a mere blip on the otherwise strong downward move? Or is this a correction within a correction? 

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 Might Face Correction

The pioneer cryptocurrency was very close to breaking the all-time high around the $58,330, which it made during February. However, sellers keep getting in the way of the bullish momentum, provoking more downside pressure to prevail. Currently, the instrument was able to rise above the $57,000 following a drop that forced it to fall towards their $56,300 level.

The focus of Bitcoin currently is not to break below any more supports, otherwise the instrument might be facing a steep correction back towards the $50,000 level.

The main target of the Bulls is breaking through the $58,000 and rising above the all-time high, as falling to do so, might subject BTC to a very bearish pattern, known as the “Double-Top”.

A double top pattern is a candlestick pattern that is created when an asset rises to the peak twice, on different and separate occasions. If the second rise can’t break that level, then a major reversal can be expected to happen on the instrument.



If this pattern emerges, then Bitcoin will be targeting the $50,000 support. This was the previous level at which Bulls were able to launch their assault on the higher levels.Furthermore, to add to the negative outlook, MACD on the 4-hour chart is showing a significant decrease in the bullish momentum.

The histogram is printing at the midline, however the moving averages are well above it giving a slowly diminishing bullish view, if we start to see a drop in the moving averages of MACD, then Bitcoin is more than likely to start with the breakdown.

Current Market Sentiment: Cautious.


EURUSD Breaks Winning Streak

The EURUSD was enjoying a three-day winning streak before the instrument encountered heavy resistance at the 1.1990 level and started a pull back. This move lower broke through the 50-SMA which broke above just as it started to move higher, doing so broke the support which was supposed to keep it in check as it currently trades just above the 1.1940, with major support viewed around 1.1920.

All of this comes on the back of increased targets for the U.S. 10-year Treasury yields.

According to the prominent analyst that gave this prediction, the U.S. 10-year yield is expected to rise towards 2.25% by the end of 2021, for prospective yields currently sit around 1.55%, which is definitely giving the USD more buying power against the EUR.

To add fuel to the already raging inferno, the USD is expected to continue gaining strength, due to the increased spending from the U.S. to boost the economic growth of the country.



In addition to the bearish momentum established on the instrument, the Eurozone slow vaccination and coronavirus lockdowns are keeping any kind of meaningful bullish pressure away. Furthermore, in their decision, the ECB said that they were willing to increase the money printing cycle to keep bond yields in check. Markets today will be focused on the German CPI (Consumer Price Index), Eurozone’s Industrial Production, the U.S. PPI (Producer Price Index), and the Consumer Sentiment in the U.S. 

Current Market Sentiment: Bearish.


Gold Falls Back to Downside

After the sharp rebound in the U.S. Treasury yields, gold began to decrease. The 10-year yield was able to regain the 1.50% level after the U.S. displayed stronger-than-expected jobs, and the wave of optimism that came from President Biden’s speech, noted the high hopes regarding vaccination attempts in the country. Furthermore, with the increase in reflation trades, the focus of markets will shift away from the non-yielding yellow metal and focus on other instruments.

Looking into the resistance and support structure of gold, we can notice that the instrument is focused more on the downside as it’s the path of least resistance. The first level which gold faces is the $1,710, which happens to be coinciding with the 50-SMA on the 4-hour chart, breaking below would set the stage for even further declines.

An additional downside will be focused on $1,703, and further down is $1,693.

 


On the other side of the spectrum, gold would be facing strong resistance around the $1,728. However, breaking above that level would subject the instrument to the pressures of the resistance zone located between $1,732 and $1,733. But, the ultimate target for Bulls is seen around the $1,743 level.

Current Market Sentiment: Bearish.


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