The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 25.08.2021
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The market remains affected by several factors. The first being the COVID-19 woes and the fading optimism surrounding the vaccine, which has caused the risk-off mood to increase. Followed by the geopolitical tensions around Afghanistan and China, the risk-off mood grew even further. Lastly, the market is going to be focused on the Jackson Hole Symposium, which will most definitely interest investors as they key in on Jerome’s Powell speech in a couple of days.
With that said, let’s find out how the markets are doing on August 25th, 2021.
Bitcoin Avoids Further Losses
Bitcoin price finally dropped below $50,000 after soaring to $50,647 on Monday. The pioneer cryptocurrency has lost some steam despite the Bulls having $56,000 in sight. The initial correction took refuge just above $49,000, but the bearish pressure continued to rise during Wednesday's Asian session. After the instrument tested the $47,517 level, Bitcoin recovered above $48,000 and is currently trading at $48,160. The flagship cryptocurrency is trading above all the key moving averages on the daily chart, the 50 SMA, the 100 SMA, and the 200 SMA. This suggests that BTC’s slightest resistance path is on the upside.
However, near-term support at $48,000 should remain intact to allow Bulls to return above $50,000. Note that the 50 SMA has recently crossed the 200 SMA, adding support to the uptrend, even though there seems to be some bearish pressure increasing. Perhaps a break above $50,000 and, for that matter, past the recently traded August high at $50,647, would pave the way for another trajectory to $56,000. Also consider that whales continue to accumulate bitcoin amid speculations that it could increase its growth to $100,000 by the end of 2021.
Meanwhile, bitcoin is trading above key support areas highlighted by certain technical indicators. This particular pattern shows that the $46,012 area is a zone of congestion for major buyers. About 922,500 addresses have bought 490,400 BTC and are now profiting from the cryptocurrency. On the other hand, the obstacles ahead of Bitcoin are relatively few, suggesting that the Bulls will hit their target with a light push; however, the $50,031 area is of interest and needs to be broken to give way to the expected $56,000 rally.
Current Market Sentiment:Bullish
EURUSD Bears Return Eyeing 1.1700
EUR/USD trades lower near an intraday low after breaking out of a three-day rally on early Wednesday morning. At the same time, the main currency pair fell by 0.15% in one day, reaching around 1.1730 before the start of the European session. COVID-19 woes, as well as fading vaccine optimism, not to mention the very cautious mood ahead of the Jackson Hole Symposium, all serve as a basis for the demand on the US dollar as a safe haven.
This allowed the DXY (Dollar Index) to rise by 0.75 on a daily basis, effectively making a U-turn from the weekly low, and signalling the first positive day in the last four. On Tuesday, the softer Richmond Fed industrial index data for August has joined the first rise in New Home Sales, and the upbeat German GDP, all of which weighed on EUR/USD prices the day before, amid risk-off sentiment.
In light of this mixed data, investors are now turning their attention to the US Durable Goods Orders for the month of July. This will either cement or reject the current Fed rhetoric need for easy money policies. The German IFO sentiment figure for August could also help the EUR/USD traders, after the previous day’s firmer GDP data from the bloc’s largest economy that backed up the Bulls. Above all, Fed Chair Jerome Powell’s speech at the Jackson Hole becomes the key event of the week.
Current Market Sentiment:Mixed
Gold Bears Keep Pressure Below $1,800
Gold trades at a low of around $1,795, up by 0.45% on the day, in a two-day downtrend ahead of Wednesday's European session. Although the risk-on mood favoured gold during the previous day, mixed US data and cautious sentiment ahead of the week’s key releases dragged the metal from a three-week top on the day before. However, the strength of the DXY is putting more bearish pressure on the metal, marking the second consecutive drop in a day.
New home sales rose sharply for the first time in four months to allay Fed concerns as lawmakers prepared for the Jackson Hole Symposium. Mixed data currently applies to US durable goods orders. However, the multi-day peak of coronavirus infections in the United States and record daily viral infections in Australia, not to mention the fading optimism about the vaccine, all influenced the market sentiment and raised the price of gold.
In addition, the cautious mood ahead of Fed Chairman Jerome Powell's annual speech at the Jackson Hole Symposium on Aug. 27 has increased the sluggishness and sentiment in favour of commodities. Given the stronger momentum and bearish MACD signals, the latest pullback is likely to extend towards an ascending support line from August 10, near $1,790. However, any further weakness past $1,790 will confirm a rising wedge bearish formation, suggesting a theoretical slump towards $1,700.
Current Market Sentiment:Bullish
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