The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 19.04.2021
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The markets kick off the week with some turbulent news surrounding the cryptocurrency market after several negative news hit the streets and force all cryptocurrencies to fall. Bitcoin has stumbled from levels above $60,000 towards lows of $51,300. However since then the instrument has been able to move back higher for the time being.
EURUSD and Gold are set to take their trading directions from the USD price dynamics as a light calendar for the day forces traders to look elsewhere for motivation. As always, vaccine updates and geopolitical news are all around the U.S, and China will have an impact on trading conditions.
With that said, let’s find out how the markets are doing on April 19th, 2021.
Bitcoin Faces Weekend Massacre
It wasn’t just BTC that took the cryptocurrency massacre over the weekend, in fact all the coins had a big wave of negativity hit their shores and drove the price back lower. The cryptocurrencies that were most affected by the move were Ethereum, Ripple, Cardano, and of course, Bitcoin. The instrument fell from levels above $60,000 towards $51,300. The latter provided enough support to allow the Bulls to move the instrument back higher, but it seems that the damage has already been done.
As mentioned in a previous section, the exact reason behind the meltdown on the cryptocurrency space isn’t quite known with many theories floating around. Whether it’s the DOJ’s tweet about cracking down on BTC money laundering, or China’s power outages, which affected miners who mainly maintain the network, the truth of the matter is, the main cause of the move lower it’s still not quite clear. Despite all the negative air around the instrument, it’s still able to move back higher as it trades near $57,000.
The short-term technical analysis is showing that things are improving and there’s a chance that BTC would see the $60,000 level once more. MACD is still showing the negative side of the bearish crash with the MAs printing below the midline, however, the histogram is closing in, which means that there could be a flip to the positive side over the next couple of days. Bulls will need a solid break above $58,000 in order for the corrective move back towards $60,000 to have any kind of meaningful momentum.
Current Market Sentiment: Cautiously Bullish
EURUSD Starts a Negative Move
With the start of this new week. we see EURUSD failing to keep the positive momentum in check as it falls back from the strong resistance at 1.1990. The instrument has fallen below 1.1950, but the bearish pressure on EURUSD does not seem all that strong at the moment as it climbs back above it. All of this is due to the weakening USD bounce after persistent weakness in the U.S. Treasury Yields. The USD continued to exhibit a somewhat weak outcome due to the dovish Fed stance which has been a huge part in the USD price dynamics.
On the other hand, the EUR sentiment remains underpinned by the prospects of an increase in the economic recovery of the bloc, especially now that the vaccine roll out in Euro is increasing with fresh supplies being given out. Furthermore, economic indicators from Germany are increasing the support for EUR, especially with the German Industrial Activity showing signs of life once more.
Later on in the week, traders will be focusing on the ECB (European Central Bank) monetary policy decision, which will most definitely have some sort of impact on the common currency. However, with a light calendar for the day, one can expect the USD price dynamics as well as vaccine updates to be the main drivers of the EUR for the day.
Current Market Sentiment: Cautiously Bearish
Gold to the North
It seems that the yellow metal is off to a great start this week as it trades near the current resistance at $1,785. The RSI and MACD on the instrument are both showing signs of decreasing momentum, but the fundamentals are the one running the show, not technicals. The U.S. Treasury yields continue to falter, as the USD pays the price and allows XAU to rise.
However, there seems to be some fundamental backlash happening at the moment, especially with how the safe haven demand is giving the USD the needed boost higher, capping any further gains on Gold. Concerns over the $2.25 trillion infrastructure stimulus package proposed by the Biden Administration is allowing for the USD to be properly bid, but at the same time, the Bulls remain quite positive, as China has increased its demand for bullions and that alone might give the XAU the needed push higher.
Looking at the resistance and support structure on gold, we can see that the instrument remains set to continue moving higher, especially without any meaningful resistances until $1,798. However, before Bulls can reach that level, they would need to fight off the offers that are being built around $1,785. On the downside, the first powerful support is seen around $1,774 followed by $1,770. Breaking any lower and Bears will be targeting the $1,760 level.
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