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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 18th February 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 18.02.2021

For todays important economic announcements, visit our Economic Calendar.

The markets are seeing some interesting movements as of late with Bitcoin continuing on with the bullish streak it’s on to even effectively break above the $52,000 and recording a new All-Time high. EURUSD and Gold, on the other hand, seem to be on the other side of the spectrum as U.S. Treasury Yields continue to weigh heavily on both instruments.

With that said, let’s find out how the markets are doing on February 18th, 2021.


Market Recap

Bitcoin’s performance of the past couple for the past couple of days has been exceptional. The movement in the Cryptocurrency had it break above the $50,000 resistance level and continued to break above the $51,000 level. The momentum didn’t stop there as the instrument managed to break above $52,000 to record a new All-Time high at $52,640. After reaching that level, the instrument has dropped a bit toward $52,200 as some consolidation of gains is appropriate this stage in the movement. The RSI (Relative Strength Index) is showing some overboughtness in the market, so one can expect some correction or at the very least some consolidation before the next leg of the movement.

The negative pressure that has been evident on the EURUSD has reached critical mass and forced the common currency lower. The instrument continued to move lower towards the 1.2020 where there was enough support to stop any further movement downwards. Currently, the instrument is consolidating just above the mentioned support around 1.2050. In retrospect, when examining the price action and the RSI, there was a clear divergence going on and the increase above the 1.2150 was the trigger that forced its fall, accompanied by the economic news, it was a recipe for more downward pressure.

The bearish pressure did not stop at the EURUSD, but also extended towards the precious metal, Gold. The yellow metal continued to battle against the Bears, who were able to force the instrument lower reaching the $1,770, effectively entering into major oversoldness as per the RSI. However, a bounce is currently taking place on the instrument jumping from the mentioned support towards the $1,785. The overall negative pressure on Gold doesn’t seem to be fading anytime soon as long as the economic indicators continue to increase.

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Bitcoin Above $52,000

Once Bitcoin was able to effectively break above the $50,000 resistance level, the way higher opened up and allowed the instrument to reach above $52,000. It was open season for more upside movements. However, with every sudden increase in the price of anything, there is bound to be a correction lower, and currently we are witnessing a dip in the Bitcoin after reaching a new All-Time High at $52,640. The bullish pressure on this instrument seems to remain intact as per the RSI and MACD (Moving Average Convergence Divergence).

The RSI on the 4-hour chart is currently printing above the 70-level indicating that Bitcoin has entered into the  overbought territory. This usually means that there is going to be some correction to the downside possibly towards the $51,000 before attempting another move higher. The MACD collaborates this story as the histogram is showing a decrease in the bullish momentum, but nothing as to completely remove it from the structure of the instrument.

 


As long as the instrument manages to remain above the $50,000 support level, which converges with the 50-SMA (Simple Moving Average) on the 4-hour chart, it’s going to be in the clear, because breaking below said level, could change the momentum on the instrument and there could be some downside movements towards $46,000. However, dips will always be supported as long as the $50,000 support level is held, anything lower and Bitcoin might be in trouble.

Current Market Sentiment:Bullish.


EURUSD Remains Under Pressure

The EURUSD continued its downward move as news out of Europe concerning the negative economic impact of the Coronavirus. The lockdown has not been favorable to any economy and Europe is just of those economies that have been hit the hardest and the result has been felt in the EURUSD as it continues to fall towards 1.2020. This drop has put EURUSD into oversold territory as per the RSI and the MACD seems to collaborate the idea of more downward pressure to come.

This downward pressure could come in the form of PMI (Purchasing Manager Index) numbers. Since this is a leading indicator, many investors will be looking for more insight on the topic. Many investors are expecting a miss on the estimates of this economic indicator as the prospect of renewed economic weakness is bound to put a dent into any currency. All of this is happening despite a stronger than expected ZEW economic confidence indicator out of Germany.



The downward does not end there, as the U.S. Treasury Yields continue to rise which in turn adds more downward pressure on the EURUSD. The sentiment around the common currency will more than likely remain quite bearish as long as the U.S. Treasury Yields continue to increase. Aside from that, the ECB’s (European Central Bank) minutes from the February meeting will definitely have an impact on the EURUSD.

 

Current Market Sentiment:  Bearish.


Gold Continues with Bearish Pressure

The bearish pressure that has been going around continued to push the precious metal even lower reaching the $1,770 support, before the Bulls decided to step in and begin a corrective bounce. Gold reached that level after the increase in the U.S. Treasury yields which made for a more attractive investment than the unyielding metal. Adding to that was the upbeat Retail Sales data out of the U.S. which gave the USD added strength.

However, don’t be fooled into thinking that the market will continue to increase as the bearish pressure is still in control of this market. Looking at the RSI which is still printing below the 30-level in oversold conditions despite the recent bounce, coupled with the MACD which still shows increased bearish pressure with the histogram printing below the midline. In order to elevate the bearish pressure, the instrument must break above the 50-SMA on the 4-hour chart which also converges with the $1,800 making it an attractive target for Bulls.

 


The Bears will continue to try and push this instrument even lower below the current support at $1,770. Should that happen, the target for Bears will be at $1,760 which is the low from November 30th. Any further downward pressure beyond $1,760, could push the instrument towards the $1,754 level which will act as a final barrier for Bulls before an all out negative move. 

Current Market Sentiment: Corrective Move Higher.


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