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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 17th February 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 16.02.2021

The bearish pressure that can be seen in the markets continues pushing ahead, well not in all markets. Bitcoin has finally been able to break above the $50,000 resistance level, however, it seems that it fell below and then rose back up, expecting high volatility. EURUSD faced immense bearish pressure that had the instrument falling below the 1.2100 support level and seems to be consolidating there. Gold finds the same bearish pressure that forced it below the $1,800 with more downward movements expected in the short-term.

With that said, let’s find out how the markets are doing on February 17th, 2021.


Market Recap

The market was going crazy yesterday as Bitcoin was finally able to break above the critical resistance at $50,000. However, despite the sudden increase above the resistance, Bitcoin couldn’t quite stay above the mentioned level and proceeded to fall towards $47,800 before climbing higher once more. There was another attempt to break above $50,000, however there was no clear break and the instrument found itself below the resistance. The RSI (Relative Strength Index) is showing that the bullish momentum might be fading as it shows some downward bias.

The common currency experienced some bullish pressure yesterday as it was able to break above the 1.2150 resistance level. However, that was very short lived and the instrument fell from the high of 1.2170 to reach below the 1.2100 support level. This is a very important break to the downside as breaking below that level, also meant breaking below the 100- and 50-SMA (Simple Moving Average) on the 4-hour chart. The RSI is also showing increased bearish pressure as the indicator prints below the 40-level, which by turn shows that the momentum is moving towards the downside.

The bearish pressure took control of the precious metal as it broke below the $1,815 support level that was supposed to keep things in check. The instrument continued to fall towards the $1,785 support as Gold trades marginally above it. The instrument attempted to break above the 50-SMA on the 4-hour chart, and failure to do so, was the main trigger that pushed the yellow metal lower. However, it seems that the RSI has entered the oversold territory printing around the 24 mark and this gives some hope of a bounce back.

What’s the strategy you’re going to use when it comes to trading these markets? Will the Bears take control of these markets? Or will the Bulls have a comeback as a reaction to the latest movements? 

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Bitcoin Briefly Breaks $50,000

The Tuesday session saw Bitcoin briefly step above $50,000. The flagship Cryptocurrency hit a new record of $50,645 on Coinbase before a sharp correction under $50,000. Support above the 50-SMA on the 4-hour played a crucial role in ensuring that BTC stays afloat and avoids declines to lower levels like the support at $46,000. Meanwhile, BTC has bounced off the immediate anchor at $48,000 and is rocking back above $50,000 at $50,240.

Bulls have eyes on levels beyond $50,000 despite the sellers’ fight for dominance. The 4-hour chart brings to light an improving bullish outlook. For instance, the Moving Average Convergence Divergence (MACD) appears to have settled above the midline. Similarly, a call to buy is likely to manifest as the MACD line (blue) crosses above the signal line. The MACD is a technical indicator that follows the trend of an asset and measures its momentum. 

 


Consequently, the chart highlights that Bitcoin is trading in an ascending parallel channel. Slightly above the prevailing market price is the middle boundary. The resistance in this area must be broken for Bitcoin to make a more vigorous approach above $50,000 and the levels towards $60,000. On the other hand, the breakout may fail to occur if the 50 SMA is lost as support. Trading under the channel’s lower boundary will also open the door for losses towards $40,000.

Current Market Sentiment:Bullish.


EURUSD Under Pressure

EUR/USD remains under pressure below 1.2100 ahead of the European open, as the US dollar clings to the recent gains amid a rally in the U.S. Treasury Yields. At the time of writing, the main currency pair trades at 1.2087, down 0.010% on a daily basis. The spot witnessed good two-way businesses, initially climbing to three-week tops of 1.2170 before tumbling to the lowest levels in two days just under the 1.2100 level.

The benchmark 10-year U.S. Treasury yields have risen to yearly highs on rising inflation expectations, courtesy of the U.S. fiscal stimulus and successful global COVID vaccination campaigns. The USD rebounded from multi-year lows, tracking the rally in the U.S. rates, which further added to the weight on EURUSD. Meanwhile, the euro traders failed to benefit from the upbeat Eurozone Q4 GDP data and German ZEW Economic Sentiment Index.



Markets now look forward to the key U.S. Retail Sales data and the FOMC minutes for fresh trading impetus. The Fed is expected to maintain its pledge to keep the monetary policy accommodative for a prolonged period, as the post-pandemic economic recovery picks up steam.

 

Current Market Sentiment:  Bearish.


Gold Falls Below $1,800

Gold licks its wounds near two-week troughs below $1,800, overwhelmed by the surge in the U.S. Treasury yields, as investors dumped the safe-haven U.S. bonds amid the revival of the reflation trades. With more U.S. fiscal stimulus coming alongside vaccine optimism, the expectations for higher global inflation drove the benchmark 10-year U.S. Treasury Yields to the highest levels since February 2020. Attention turns towards the U.S. Retail Sales data and the FOMC minutes for fresh near-term trading opportunities in gold.

Technical indicators are showing that gold remains capped below the $1,796 barrier. Further up, $1,803 will test the bullish commitments. The next relevant hurdle awaits at the previous week’s low of $1,808. The XAU Bulls are likely to face an uphill task on the road to recovery towards $1,822.

 


If the selling momentum resumes, the spot could drop to test the previous day low at $1,790, below which fierce support at $1,781 would be put at risk. Any lower and the $1,777 could be next on the sellers’ radars.

Current Market Sentiment: Bearish.


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