The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 16.04.2021
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After the market experienced decent bullish pressure that came on the back of a soft USD, we are now seeing the opposite. Markets are starting to turn as the USD gains strength, thanks to the ongoing geopolitical tensions between the U.S. and China. Bitcoin has broken below the ascending channel we’ve been talking about which increases the bearish pressure and could lead it lower towards $60,000.
EURUSD continues to fall due to the USD strength. After it was unable to break above 1.1990, the instrument is experiencing the negative pressure as it trades near 1.1950. Gold, on the other hand, is showing some slight corrective movements after it reached a 2-month high of $1,770.
With that said, let’s find out how the markets are doing on April 16th, 2021.
Bitcoin Eyes Potential Bearish Comeback
Bitcoin has resumed the sluggish price action a day after hitting a new record high close to $65,000. The recent upswing occurred after Coinbase was directly listed on the Nasdaq exchange. At the time of writing, the flagship cryptocurrency exchanges hands near $61,800 which is below the ascending channel that has kept the bullish momentum going. There’s been immense pressure on the Bears to continue moving lower as they broke through the lower bound of the ascending channel.
Now that the barrier has been broken, Bitcoin has only one way to go and that’s downwards. The next target for the Bears is seen around $60,000, however, before reaching there, BTC will most likely battle against the 50-SMA (Simple Moving Average) on the 4-hour chart. It might not do much, but there’ll definitely be some Bulls there to halt the descent of the instrument. The bearish outlook is strengthened by the MACD (Moving Average Convergence Divergence) which is starting to show a build in the negative pressure with the MAs turning downwards and the histogram printing below the midline.
Should, by some chance, Bitcoin find itself in the ascending channel once again, the Bulls will have a field day and will continue the march higher, as the midline of the channel will be the level to beat in order for the movement to be sustainable. This will allow the instrument to test $65,000 once again and possibly put it on course to the $70,000 mark.
Current Market Sentiment: Bearish
EURUSD Falls Due to USD Strength
As the European session kicks off, we observe the EURUSD licking its wounds around the 1.1955 support level, after it was unable to break above the 1.1990 resistance level. This would mark the second day of bearish pressure. The main reason for the drop in EURUSD comes from the EUR side of things, the German Bund yields have dropped which triggered an adverse reaction as people started to sell the EURUSD. The negative pressure didn’t stop there as the delay in economic recovery due to COVID-19 and the lack of vaccines just compounded things for the common currency.
There was some news circulating around the wires, concerning an extended ban on the Johnson and Johnson COVID-19 vaccine by the U.S. CDC (Center for Disease Control and Prevention). While this information didn’t have much of an impact on the U.S. and U.K., due to the high level of vaccine stock they have, it could prove to be problematic for the Eurozone. Adding to the USD strength is the fact that more geopolitical tensions between the U.S. and Russian and the U.S. and China are adding to the risk-off sentiment and allowing for USD demand.
The economic data from the Eurozone, especially the Consumer Price Index (CPI) for the bloc, is expected to entertain traders for the most time. The figure is expected to confirm the 1.3% year-on-year figures, however, it’s the U.S. data that will be the most important news, with traders looking for fresh direction from those figures. Updates over the vaccine and economic recovery will also play a huge role in determining the next move for the EURUSD.
Current Market Sentiment: Bearish
Gold Looks at $1,755 Support
Gold has found enough bullish pressure to move higher on Thursday. The precious metal reached a two-month high of $1,770, after some dovish expectations from the Fed came to light. This started a sell-off in the U.S. Treasuries across the curve. However, the traders are now focusing on the U.S. UoM Consumer Sentiment data, which might give them some idea on how to trade the yellow metal.
Currently, we’re seeing the instrument decline slightly as the European session kicks off on Friday, being weighed down by the recovery in the U.S. Treasury yields. Moreover, the geopolitical tensions between the U.S. and China continue to simmer as this could increase the demand for the USD, and in turn exert additional bearish pressure on gold.
Looking at the support and resistance structure, we can notice that the instrument is engaged against the $1,760 support. This is the first level of support against any downward move, followed closed by $1,755. Sellers will be focusing on breaking below that level, since it would negate the near-term bullish momentum and allow for further declines, possibly reaching $1,750. This is an important level as the Bears would challenge the Bulls' commitment to the upside.
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