The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 01.04.2021
The start of a new month is always something interesting in the markets. There will be month-out flows as well as month-in flows which can affect the trading environment greatly. Bitcoin’s $2,000 flash drop due to liquidation seems to have come and gone as the instrument sets its eyes on the $60,000 resistance. EURUSD continues to face extreme bearish pressure especially after French President Macron’s speech about locking the country for four weeks once again. Gold found enough reprieve as it bounced from the $1,680 support amid a retreat in the U.S. Treasury yields.
With that said, let’s find out how the markets are doing on April 1st, 2021.
Bitcoin Battles Against $60,000
The $600 million worth of long positions on Bitcoin was liquidated yesterday, this caused a massive downward move that saw the cryptocurrency fall $2,000 within 5 minutes. This type of sudden and aggressive move isn’t uncommon for BTC, however the reason behind the drop, this time, is. The instrument was trading around the $59,400 level before the liquidation began, this drop brough the instrument face to face with the current support level at $57,000.
However, the Bulls were not going to give it up so easily, not without a fight. This helped BTC to rally back higher reaching $59,800 before correcting slightly. The overall situation that is currently surrounding BTC is one of consolidation between $57,000 and $60,000, however, despite the current consolidation mode, the chances of a break below $57,000 remain a real threat if the Bulls are unable to gather their forces and push the instrument above $60,000.
If the cryptocurrency fails to establish a decent foothold above $59,800 and $60,000, a downside correction could be established. This could lead to more downside with the first level of support seen around $58,400. Further down, the instrument will be facing against the $57,000 psychological support. The Bears will want to establish a handheld below that level in order to keep the pressure of more downside on the instrument.
Current Market Sentiment: Cautious
EURUSD Consolidates Below 1.1750
We’ve been monitoring this instrument for quite some time now, and after the break below 1.1750, it would seem that the Bears are taking a breather as they keep the pressure on for another break below 1.1700. Investors are looking ahead for the trading day as they set their eyes on the Eurozone and U.S. PMI (Purchasing Manager Index) data. With that being said, the pressure on EURUSD remains quite bearish especially after France’s third lockdown because of another surge of COVID-19 cases.
French President Macron announced yesterday that schools will be shut down, travel restrictions will be imposed, and non-essential shops will be closed, all for the next four-weeks. On the other side of the Atlantic, investors are weighing Joe Biden’s $2 trillion infrastructure spending plan, which democrats are saying is not large enough to address all the aging infrastructure that the country has. This combined with the retreat in the U.S. Treasury yield is keeping a lid on any USD gains, which helped the EURUSD from staying on its downward course.
There’s a lot of economic data for today, which is expected to keep market participants busy as they wait for this new fresh input of data. Investors will be looking at the German Retail sales and Euro area Manufacturing PMI. However, it will be the U.S. ISM Manufacturing PMI that will hold the key for any directional change in the major pair. Let’s not forget that the instrument will continue to be influenced by the latest COVID updates, yield price dynamics, and the market sentiment as a whole.
Current Market Sentiment: Bearish
Gold Finds Support
The negative momentum that Gold has been under was abated long enough yesterday, that the instrument was able to find a decent enough support to move higher. The $1,680 level was there when the instrument needed it the most and helped it rise back above $1,700 and is currently trading around $1,710. This bullish momentum comes on the back of a retreat in the U.S. Treasury yields, and simultaneously, concerns over Joe Biden’s infrastructure plan not passing through the needed channels are rising.
The situation in Europe is putting a dent into the global risk appetite as fears of fresh lockdowns and increases in COVID-19 cases are worsening the risk sentiment. The lack of risk appetite will be a boon for the USD which might rise on the expense of the yellow metal. However, market participants will watching the economic calendar for the U.S. jobless claims as well as the U.S. ISM Manufacturing PMI, before the market gears up for Friday’s NFP (Non-Farm Payroll).
Looking at the support and resistance structure on gold, we can see that the first level of resistance that the yellow metal will face is around $1,715, above which the $1,722 powerful resistance will come into play. The Bulls must break above that resistance in case they wish to have a strong recovery from the lows that we’ve seen. Any higher, the $1,725 and $1,730 will test the commitments of Bulls to the upside cause.
Current Market Sentiment:Cautious
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