The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 30.03.2021
The market continues to be affected by the U.S. treasury and especially after the current fiasco that’s been happening in the U.S. stock market. Bitcoin appears relishing the good news as Visa begins to accept payments through cryptocurrency starting with USDC (USD Stable Coin).
EURUSD continues to fall as the divergence in the economic activity between the U.S. and Europe continues to expand. While gold is also being affected by the probability of more inflation, an increase in demand for the U.S. Treasuries is happening. This forced gold to break its two-week consolidation.
With that said, let’s find out how the markets are doing on March 30th, 2021.
Visa Endorses Bitcoin
In the latest fundamental development concerning Bitcoin, the payment processing company “Visa” has given its endorsement to the cryptocurrency. According to it, the demand for cryptocurrency transactions has been steadily increasing till it reached a point where it can no longer afford to sit on the sidelines. As a first step, USDC (USD Stable Coin) will be used allowing users to spend digital assets without converting them to fiat.
On the news, Bitcoin has been able to rise towards the $58,400 resistance level. This is a very important benchmark for the instrument, as it failed to break above it once before, so the traders are questioning whether or not it will hold the bullish momentum for now.
For the instrument to reach that level, it had to break above the 100-SMA which only served to extend the bullish momentum. It’s important to take into account that Bulls need to establish a strong foothold above the $58,000 level as it would ensure market stability, while traders will be attempting to reach the $60,000 psychological level once again.
Looking at the technical indicators on the instrument, we can notice that the bullish pressure has established itself on BTC. The MACD (Moving Average Convergence Divergence) is suggesting just that, while the Bulls have a firm hand on the instrument.
However, this bullish outlook is reinforced with the MAs breaking above the midline, while the RSI (Relative Strength Index) is printing above the 60 level which gives hope of more upsides to come. Nonetheless, It’s good to note that this entire bullish scenario could be invalidated if there were a break below the $57,000 support level.
Current Market Sentiment: Cautiously Bullish
EURUSD Remains Weak
The bearish bias remains intact on the common currency despite the current signs of an increase. The main culprit behind this is the rising expectations of an increase in inflation in the U.S. which, in turn, drives the U.S. Treasury yields higher, which serves to boost the USD against all other major currencies, and especially against the EUR. Furthermore, the economic divergence between the US and Europe only serves to widen the divide and increase the negative pressure on the currency pair.
From a technical perspective, the EURUSD appears to be on the verge of forming an inverse cup and handle formation on the 4-hour chart. This is a negative signal and foretells more downside pressure to be experienced by the major pair.
The neckline seen around 1.1750, reveals that a break below that level would open the currency pair up for even further downside pressure as Bears will more than likely attempt to reach the 1.1600 psychological support.
The technical indicators are also reporting an increase or at least stability in the negative pressure. RSI is trading flat, and it holds below the midline (50), signalling that the negative pressure is far from over.
But, there’s still hope that the instrument manages to stay above 1.1750 and if that level was to hold up, a solid bounce could be witnessed. If the Bulls manage to capitalise on this bounce, their target would be around 1.1800.
Current Market Sentiment: Bearish
Gold Breaks Consolidation Downwards
The revival in buying interest for the U.S. Treasury yields proved to be the tipping point for the precious metal gold. The instrument has broken the consolidation that’s been trading in for the past two weeks, and the result was a move towards the $1,700 support level. However, inflation risks continue to mount, and this helps with the prospect of infrastructure spent by the Biden administration, which only fueled the demand for those Treasuries.
The increase in those rates is helping the USD gain a boost on the expenses of the yellow metal. Currently, the USD sits at a new four-month high across its main competitors. Not to mention the current turmoil in Wall Street after the blow up in the Archegos fund, which lost $20 million in overnight trading. This spooked traders from all across the spectrum who fled to the USD as a reliable haven, by adding more negative pressure on gold.
Looking into the support and resistance structure of gold, we can notice that the first support is seen in a zone between $1,701 and $1,700. This level is very tough to break under, however, if the Bears find the needed momentum to physically break through, then the next level is seen around $1,695 and followed closely by $1,690. This tight cluster of supports should keep an extensive downward momentum at bay.
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