The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 21.04.2021
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The risk sentiment in the market has shifted once more as traders look towards the next couple of days for more input on how the markets will move. Bitcoin has entered the consolidation zone as the Bears have a much better chance than the Bulls to pull a move since options expiry this Friday are geared towards the Bears. EURUSD is in a head and shoulders pattern signalling that there might be a reversal coming, however, it seems that the consolidation power is much bigger at this moment. Gold is showing some bullish pressure as Bulls attempt to break it above $1,800 which might happen if the risk sentiment continues to deteriorate.
With that said, let’s find out how the markets are doing on April 21st, 2021.
Bitcoin in Consolidation
Bitcoin has assumed consolidation after stepping marginally above $56,000. The flagship cryptocurrency had experienced a 74% growth in three months before the April 18 declines to $51,000. Bitcoin had also hit a new all-time high of around $65,000 amid the hype of Coinbase listing on Nasdaq. However, as options expire on Friday, the price remains vulnerable to losses while Bulls focus on reclaiming the ground above $60,000. It seems that the Bulls are at a disadvantage especially as Friday rolls by with Option expiries.
The 4-hour chart shows Bitcoin trading within the confines of the short-term symmetrical triangle. This pattern doesn’t have an exclusive bearish or bullish bias, adding more credibility to the idea of consolidation. A break above the triangle’s upper trend line will likely send Bitcoin toward $60,000.
On the downside, if support at $56,000 fails to hold and BTC starts to lose ground toward $55,000, declines are likely to increase towards $50,000. Note that bearish input from the put (sell) options) may add overhead pressure, forcing Bitcoin to seek refuge under $50,000.
Current Market Sentiment: Consolidation with Bearish Bias
EURUSD Consolidates Above 1.2000
EURUSD has stalled its rebound below 1.2050, consolidating the recent losses above 1.2000 ahead of the European open. The USD holds onto the recovery gains amid a downbeat market mood, undermined by the continued surge in COVID-19 infections and the imposition of stricter restrictions worldwide. The US Treasury yields stabilize at higher levels amid ongoing developments around President Joe Biden’s infrastructure proposal.
On the EUR-side of the equation, Johnson & Johnson’s resumption of the COVID vaccine rollout in Europe, with a safety warning, after the European Medicines Agency (EMA) approval, has been overlooked by the euro bulls, as the broader market sentiment leads the way.
Investors also turn cautious ahead of Thursday’s European Central Bank (ECB) monetary policy decision, especially in light of Fed Chair Powell’s latest comments. Powell said on Tuesday that the central bank remains fully committed to both legs of the dual mandate. However, as Thursday’s decision is delivered, the market expects that the ECB is set to leave its policy unchanged in April but acknowledge a brighter outlook.
Current Market Sentiment: Consolidation
Gold Bulls Push Higher
Gold has continued to push higher as the Bulls hold on to the higher ground. The objective is to capture the $1,800 mark, this mission is made easier as the weaker Treasury yields boost the appeal of the non-yielding metal. However, before reaching that level, Bulls will need to defeat the $1,785 resistance which proved to be problematic the first time around. This time, both the RSI and MACD are on board for more upside.
The returns on the market have tumbled alongside the Wall Street indices. Thanks to the risk-averse mentality that the market has adopted, which is due to the resurgence in COVID-19 infections on a global basis. Gold wasn’t really looking at the USD pullback from the multi-week lows as the overall sentiment is allowing the yellow metal to rise to the occasion.
Looking at the support and resistance structure of gold, one can notice that the first level at which Bulls will attempt to break is $1,785. If that happens, the next level on the Bulls’ radar is $1,790, all in preparence to attempt a break above $1,800. On the downside, the $1,775 is the first level at which Bulls and Bears will either attempt to save or break, respectively. Further down, and the instrument will be battling against the $1,770.
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