The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 21.07.2021
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The market is trading in a kind of a nervous sentiment ahead of the ECB decision on Thursday, followed by the Fed’s decision in the week after that. Instruments have seen more sideways movement with not much going on, as investors are simply not willing to put their money in such an uncertain market with COVID-19 woes continuing to worsen. The EURUSD and Gold are both feeling this lack of momentum as they consolidate their respective movements until more impetus is provided to send the instruments where they need to go on. Bitcoin’s movement is seen as a sudden recovery after the instrument broke below many serious supports, giving Bulls some hope of a recovery, but first a break above $31,000 is needed.
With that said, let’s find out how the markets are doing on July 21st, 2021.
Bitcoin Attempts Recovery
The price of Bitcoin continued to fall below the $30,200 support level, and the instrument kept on moving lower, reaching far below the $30,000 and the simple 100-hour moving average, further entering the bearish zone. It even fell below the $29,500 mark and reached a low of $29,313. Bitcoin seems to form a support base above $29,250, with initial upward resistance close to the $30,000 mark.
This is close to the 23.6% Fibonacci retracement level of the recent downtrend, falling from a high of $31,900 to a low of $29,313 point. The first major resistance is around $30,600, which is close to the 50% Fibonacci retracement level of the recent downtrend, falling from a high of $31,900 to a low of $29,313. On the hourly chart, BTC/USD is also forming a major downtrend line, with resistance at around $31,300. In the short term, Bitcoin prices may begin to rebound sharply above $30,000, but they may encounter obstacles near $31,000.
If Bitcoin fails to recover above the resistance levels of $30,000 and $30,600, there’s a risk of further losses. The initial support for the downside is around $29,350. Now the first major support is near the $29,250 area. A clear break below the recent lows and $29,250 may require a break of the $29,000 mark. The ultimate level for the Bears is seen around $28,000.
Current Market Sentiment:Bearish
EURUSD's Bear and Bulls at a Standoff
The euro/dollar currency pair rebounded from the intraday low and fell by 0.06% to around 1.1770 on the day just as the European session gets started on Wednesday. The major currency pairs withdrew from the three-month low of the previous day and then rebounded from 1.1755. This move came in convergence with the move in Wall Street, which saw gains due to earnings optimism and hope for further incentives, the pair’s bears kept a hold on the reins as COVID-19 woes intensified.
Secretary of State Wendy Sherman’s remarks also affected market sentiment, as the diplomat expressed concerns about North Korea and China at a trilateral meeting in Tokyo. Fear made it difficult for the economy to recover from the last pandemic, and therefore prompted lawmakers to keep capital flows calm, rather than withdrawing optimists. Looking ahead, a simple timetable puts the ECB risk catalyst in the driver's seat. Therefore, any good news from the US Senate can describe the bearish momentum of the EUR/USD before tomorrow's ECB meeting.
The EUR/USD is still under pressure in the bullish monthly declining wedge between 1.1825 and 1.1735, but the recent rebound from multi-day lows is supported by the short-term support line and is tracking the mid-term rebound in momentum signals.
Current Market Sentiment:Bearish
Gold Falls at Odds with Renewed USD Strength
After the Bulls failed to keep the yellow metal at higher levels, gold showed a slight decline and headed towards the $1,800 support level. Despite the improvement in the market sentiment, the demand for the US dollar has soared across the board, suppressing concerns about the Delta Covid option while fears of uncontrolled inflation continue to fade, keeping the US dollar healthy.
At the same time, positive government bond yields have also increased the relief pressure on gold, as infrastructure spending updates are giving some positive vibes to the precious metal. Looking ahead, risk sentiment and dollar price dynamics will remain the focal point of new gold trading. As of Wednesday, the gold price was at $1,809 and was gaining momentum in the Asian session. Gold hit a weekly high on the previous day, then fell from $1,825 and closed down. The bearish momentum was able to conquer the most important technical levels, namely the multi-day resistance line and the 200-day moving average.
US President Joe Biden's optimism on infrastructure spending and hopes for strong earnings in the second quarter can be seen as an important catalyst for risk sentiment. In short, the simple timetable and cautious mood ahead of Thursday's ECB meeting, in addition to the Federal Open Market Committee next week, may leave gold on the sidelines. However, if a stronger U.S. dollar might affect the exchange rate, then Covid issues and incentive updates can make commodity traders happy.
Current Market Sentiment:Consolidation
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