The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 26.03.2021
The negative pressure in the markets continues to play a main role as we’ve seen how most of the instruments have been trading recently. Bitcoin has reached the Bears’ ultimate goal at $50,000, however the Bulls didn’t want to let this level go without a proper fight.
EURUSD falls below the 1.1800 level after a combination of positive USD and negative EUR factors that proceed to dominate this market. Gold, however, hasn’t moved in such a long time and most people are beginning to wonder whether or not this instrument is pulsating as it waits for more input from the U.S. economic calendar.
With that said, let’s find out how the markets are doing on March 26th, 2021.
Bitcoin Reaches $50,000
The negative pressure that Bitcoin witnessed a couple of days ago (March 24th 2021), as a result of a failed breakout above the 50- and 100-SMA resistance cluster, also proceeded today, as BTC reached a low of $50,000 before recovering higher. The tenacity of the buyers to keep the mentioned support in check will go a long way in allowing BTC to rise back to the higher ranges that we’ve used to see it traded upon. On the other hand, the Bears are salivating at the prospect of more downside as it would seem that the only thing that would sate their hunger, would be a break below $50,000.
Technical indicators are showing that the negative pressure is abating for the time being with the RSI and MACD, that are showing a change in their trajectories. The RSI has managed to break above the 40 level indicating that the bearish movement is losing momentum, however, that doesn’t mean that the bullish one has come into play, there’s still a long way to go before that happens.
Particularly, only a break above the 60 level on the RSI would signal the end of the bearish pressure. The MACD is also showing the loss in the bearish momentum, while the histogram inching closer to the midline with the MAs is way underneath the same midline.
The main focus for Bulls at this time is to break above $53,000. This would be crucial for the Bulls to pull off, towards a failure to break above the mentioned resistance that would lead to an extended bearish pressure that could actually break below $50,000.
The bearish floodgates would be open for an extended period of time, if the $50,000 support level was indeed broken, the Bulls need to fight with every last tooth and nail to keep any runaway negative pressure under control.
Current Market Sentiment: Bearish
EURUSD Breaks Below 1.1800
The EURUSD experienced overnight losses that led to a fresh four-month low, below 1.1800. However, as the Asian session kicked off, the pair was able to recover higher, albeit it remained extremely weak to any movement in the USD.
Also, the instrument is currently trading below the 1.1800 level which is acting as a short-term resistance, and the main one is seen around 1.1830. This move higher in EURUSD has been attributed to the rise in the Asian equity market, which prompted a sell-off in the USD safe haven and allowed some bullish support in the pair.
The double whammy coming from the positive U.S. economic recovery and the pace of COVID-19 vaccinations, along with the lackluster economic situation of the Eurozone which is plagued by a third-wave infection rate with forced lockdowns, isn’t allowing any kind of meaningful movement higher in EURUSD. This combination of negative pressure is keeping a solid lid on any upside move that the common currency would exhibit.
Traders are now focusing on the German IFO Business Climate reading. This economic indicator is expected to showcase an improvement in the Business Morale, however, with the current weak sentiment regarding EUR, don’t expect much upside from a better-than-expected read.
From the U.S.’s side, the Core PCE price index will be the indicator to watch as it’s the inflation level that the Fed uses instead of CPI. These could produce some interesting trading opportunities, so keep an eye out.
Current Market Sentiment: Bearish
Gold Remains Trapped
Gold hasn’t been experiencing much momentum in any direction, and remains in consolidation without much movement. However, the spike yesterday above the $1,740 gave some hope for a sudden boost in volatility, but it dissipated as quickly as it manifested.
The USD remains the main contributor to the movement of gold, as the greenback seems to be exhibiting some strong bullish pressure thanks to a combination of factors.
The ongoing optimism regarding a speedy and healthy U.S. economic recovery and higher Treasury yields is allowing the USD to remain buoyed. The better-than-expected U.S. jobless claims further, and fueled the optimism of a faster economic recovery in the U.S., not to forget the vaccine rollout and you’ve got a perfect storm for a bullish USD expectation.
Gold is currently waiting for a fresh batch of U.S. economic releases. This includes the Fed’s preferred inflation metric - the Core PCE index. This might provide the much needed impetus for gold to get a move in a certain direction, as this extended period of consolidation isn’t helping gold’s case.
From a technical point, the instrument is caught between the 50-SMA as resistance and 100-SMA as support. A much needed and decisive break through either one is needed to remove the consolidation and directionless trading.
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