The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 25.03.2021
The riskless atmosphere continues to play a major role in the markets as investors flee risky traders and go to the safe-haven trades. Bitcoin has continued with the bearish pressure as it fell below the $53,000 support as Bears attempt to reach the $50,000. EURUSD continues to see increased bearish pressure despite the obvious strength of the 1.1800 support. Gold remains in consolidation mode, but seems adamant on breaking above the $1,740 with news from the U.S. market coming in later on in the day.
With that said, let’s find out how the markets are doing on March 25th, 2021.
Bitcoin Breaks $53,000
We had mentioned that the negative signals on Bitcoin continue to increase. This comes on the back of the Bulls’ failures to effectively break above certain resistance levels opening the door for Bears to capitalize and drive BTC lower. Now, there was a recovery in place before the downward momentum took hold. This move led Bitcoin towards the $56,000 level but with the presence of both the 50- and 100-SMA keeping a lid on any upward move, the instrument quickly fell back down.
The instrument faced increased bearish pressure, enough to push BTC past the 200-SMA which kept any negative pressure in check. Breaking below said SMA increased the boldness of the Bears which led them to test the $51,500. Luckily, the presence of buyers at that level was enough for the Bulls to turn the negative pressure around as BTC attempted to break above the 200-SMA once again. This is a very crucial level, should the instrument fail to effectively break above the mentioned SMA, more negative pressure can be expected.
Looking at the technical indicators of the RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) we can notice that the instrument is recovering from the downside move, but is nowhere out of the woods just yet. The RSI is still printing below the 40-level, while the MAs of the MACD are below the midline and there doesn’t seem to be any signs of a reversal higher happening. Should the Bears managed to break below the current support at $51,500, they will face the $51,000 followed by the Bears’ ultimate goal of $50,000.
Current Market Sentiment: Bearish
EURUSD Reaches Multi-Month Lows
After the increased negative pressure the EURUSD witnessed, it was able to recover from the four-month lows and trades around the 1.1820 level. The pair, once again, has shown some resilience at the 1.1800 as there has been some movements in the Asian equity market. Despite the recent sell-off in Chinese stocks, the Asian stock market was able to rise, which acted as a headwind against the USD, which in turn gave the EURUSD some needed support to rise from the crucial support at 1.1800.
However, traders shouldn’t get ahead of themselves as any meaningful recovery in the EURUSD will have to face off against an elusive economic recovery in the Eurozone market. Traders remain very concerned about the pandemic related restrictions that the Eurozone has implemented and how those could be able to derail the already weak economic recovery. This was reinforced by yesterday’s muted market reaction to a better-than-expected read on the PMIs (Purchasing Managers’ Index).
With the lack of any meaningful economic data coming from the Eurozone today, the EURUSD will be at the mercy of the USD price dynamics. However, comments by the ECB (European Central Bank) President Christine Lagarde – during a virtual panel discussion hosted by the Bank for International Settlements – might influence EURUSD and provide a fresh move on the instrument.
Current Market Sentiment: Cautiously Bearish
Gold Attempts a Break Above $1,740
Gold has been attempting to break above the $1,740 for quite some time now, and each time another blow keeps the yellow metal from rising higher. The renewed buying interest in the U.S. Treasuries have kept a very big lid on any kind of meaningful gains that the non-yielding asset might make, which in turn gives the USD another big bullish push and rises against its main competitors.
The increase in U.S. rates is thanks to the expectations coming from the Biden Administration. This new administration is expected to reveal an infrastructure spending plan which has shown just how the U.S. economic recovery is going, which in turn is hurting the chances of a recovery in the precious metal. Add to that, comments from US Treasury Secretary Janet Yellen which has helped revive the bullish pressure on the bond market.
The safe-haven status of the USD has given strength to it after the rise in COVID-19 cases in Europe pushed investors to seek less riskier assets such as the greenback. Other than that, Gold will more likely continue with directionless trading as it seeks fresh input from key U.S. economic data which include the US GDP revision, Core PCE Price Index and the weekly Jobless Claims.
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