The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 14.05.2021
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After the rather shaky week we’ve had in the Cryptocurrency and Forex market, it would be safe to say that market participants will be wanting to sit this day out and wait for things to cool off before entering the markets once again. Bitcoin seems to be consolidating after the whole Tesla debacle of yesterday, however, big players are still HODLing and buying the dips, which might trigger some movement higher.
EURUSD is facing a tough time especially with how the USD seems to be gaining strength thanks to the upbeat US Jobless Claims from yesterday. However, today’s economic calendar will probably shed some light on the future movements on the common currency pair. Gold is consolidating as traders are taking their cues from the Treasury yields rather than anything else. Neither the Bulls or Bears have the upper hand when it comes to the yellow metal.
With that said, let’s find out how the markets are doing on May 14th, 2021.
Bitcoin Crashes Below $50,000
We’ve explained how Tesla’s announcement had managed to break the current bullish structure in bitcoin. The instrument had dropped heavily, crashing below the $50,000 support structure, and didn’t find enough bullish support until $46,000. In doing so, the trillion dollar market capitalisation that bitcoin was enjoying has been lost, and seems to remain under pressure for the most part. However, BTC’s dormant supply shows some increase despite the price drop, meaning long-term holders have again resolved to accumulate by buying the dips.
It looks like some of the big and smart players are grabbing this opportunity to buy BTC at lower rates. Yesterday, MicroStrategy CEO Michael Saylor announced an additional $15 million worth of Bitcoin purchases. On the other hand, Bitcoin exchange outflows continue reducing BTC supply. Some reports are showing that there have been at least 10,000 BTCs that have left the Coinbase exchange. Furthermore, mining difficulties are making things a bit more harder to increase the supply of BTC.
All these improvements in the BTC fundamentals are a clear signal that Bitcoin is staging its recovery ahead. The Elon drop has contributed to a massive market crash with the overall crypto market losing over $300 billion. However, institutional players continue to remain net positive of Bitcoin’s future. With the technical background showing that the RSI is within oversold conditions, it could mean that the time is ripe for another move higher.
Current Market Sentiment:Cautiously Bullish
EURUSD Seeks to Break 1.2100
The common currency managed to find some buyers and turned firmer for the second consecutive day, trading around 1.2085 as the European session for this Friday kicks off. The currency major pair felt the bearish pressure from the increase in the US’ inflation metric, however, the support at 1.2050 was there to keep things in check. What has helped the recent drop was the market’s current stance on the Fed’s tapering as participants are thinking the Central Bank will begin tapering sooner than expected.
However, EURUSD was able to show some increase during today’s Asian session as hopes of upbeat ECB minutes for the April meeting are giving traders something to be optimistic about. Speaking of which, the European Central Bank (ECB) policymaker Yannis Stournaras noted on Thursday that markets show an increase in inflation expectations but added that inflation worries in Europe are not the same as in the US. In fact, the ECB policymakers are not only less worried about inflation but also hope for a stronger recovery in 2021 and 2022, per the latest economic forecast.
Although the ECB left its monetary policy unchanged in the last two meetings, the tone of the statement and press conference seem to draw a bullish scenario, which if confirmed in today’s ECB minutes, could give EURUSD Bulls something to cheer about. Meanwhile, downbeat US data becomes necessary for the currency pair to remain firm. Bulls will be eyeing a move above the 1.2100 in order to continue a bullish scenario which sees the instrument breaking above 1.2180. Should that not come to pass, the Bears will be eyeing a move below 1.2050 in order to reach the psychological support at 1.2000.
Current Market Sentiment:Waiting on Data
Gold Remains Above $1,800
Gold continues to be pressured by the Bears as it extends the previous day’s losses to early Friday, down 0.10% to $1,823 by the press time. In doing so, gold traders have put the US 10-year Treasury yields as the main focus for any movements, completely ignoring the mildly bid S&P 500 Futures and soft US dollar. There are many reasons behind the moves, the most prominent however is the mixed play between the COVID-19 woes in Japan and India, recently in the UK, as well as the US optimism backed by the firm vaccination movement.
And yet, market participants seem to be very indecisive as of late, and this could be traced back to the Fed’s sustained rejection to policy adjustments despite recently cited reflation fears, not to forget strong US Jobless Claims versus downbeat Nonfarm Payrolls. Moving on, cautious sentiment is likely to weigh on the gold prices as traders await the US Retail Sales for April, as well as the preliminary readings of the Michigan Consumer Sentiment Index for May.
The mentioned indecisiveness of market participants on the yellow metal has made itself known technically. Looking at the RSI on the 4-hour chart, one can notice how the indicator is printing right at the 50 midline indicating that neither the Bulls or Bears are in control of this instrument. Driving the matter forward, the MACD (Moving Average Convergence Divergence) is showing the same setup as the MAs are moving lower towards the midline, while the histogram is showing a decreasing momentum further focusing on the consolidation view.
Current Market Sentiment:Consolidating
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