The Daily Cryptomenon
4th January 2021
Your daily Market Analysis News brought to you by the CryptoAltum Team.
This analysis was written at 9:00 am GMT +3, on 4.1.2020
We’ve all heard the cringe sentence that almost every person says every year “New Year, New Me”. While, it might be cringe worthy, it is certainly true when it comes to this analysis. While previously we had tackled three Cryptocurrencies Bitcoin, Ethereum, and Ripple, this year will have us focusing on Bitcoin, Euro, and Gold. Yup, we’re changing it up a bit.
With that said, let’s find out how the markets are doing on January 4th, 2021.
When will the Bullish market on Bitcoin ever end? Not that we want it to, have you seen the gains that have been happening? That aside, the bullish momentum has become extremely over extended, if you’d look at the large timelines, you’d notice just how overextended they really are. BTC has reached yet another all-time high towards the $34,810, from there a small correction has taken place towards the $33,270 as it consolidates it’s gains around those levels.
EURUSD has opened the new year with a gap higher. That’s one way to kick off the year. Investors and traders alike are trying to send that positive energy out there to beat the hellish year of 2020. That aside, there does seem to be some bearish momentum taking over the common currency as the RSI prints below the 50 level after the failed break of the 1.2310 resistance level.
There has been some talk that Gold could be replaced by Bitcoin as the safe haven instrument of choice, but that’s only talk as Gold remains the ultimate safe haven. The price has increased by the start of this year as fears seem to be mounting that there might be another global recession as the pandemic hasn’t slowed down one bit. The yellow metal has reached a high of $1,926 and seems to be consolidating the gains at those levels.
What’s the strategy you’re going to use when it comes to these markets? Will the bullishness continue in the markets? Or will there be some corrections or reversals?
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Bitcoin Sets New All-Time High
There was a sharp increase in Bitcoin above the $32,500 resistance zone, as it even broke the $33,500 and $34,000 levels to continue higher. The Bulls even attempted a test of the $35,000 level. A new all-time high was formed near $34,810 before the price started a downside correction. There was a break below the $33,500 and $33,000 levels. The price tested the $32,500 zone, where it found a strong support.
Bitcoin started consolidating in a range above the $32,500 zone, managing to climb above the $33,000 level. However, the price failed to clear the $33,800 resistance zone. It is now trading in a contracting triangle with resistance near the $33,550 zone. A clear break above the $33,550 and $33,800 levels could open the doors for a fresh increase. A close above the $34,000 may further increase the chances of a push towards $35,000 and $35,500 in the near term.
If Bitcoin fails to clear the $33,500 and $33,800 levels, it could break the triangle support and continue lower. The next major support is near the $31,500 level. There is also a major bullish trend line forming with support near $31,000 on the same chart. Any more losses could lead the price towards the $30,000 level and the 100 2-hour Simple Moving Average.
Current Market Sentiment:Bullish.
EURUSD Holds Gains Around 1.2250
EURUSD is off the highs, trading around 1.2260 ahead of the European open. It seems to have started the year on the back foot as the resistance at $1.2310 has rejected the bullish momentum resulting in a massive drop towards the 1.2210. However, the new year came and with it some new positive momentum as the gap higher helped the instrument reach the $1.2260 with the $1.2270 acting as the first level of resistance.
There are many fundamental factors that are affecting the EURUSD. The first thing to take into consideration is that the US dollar is attempting a comeback amid global coronavirus concerns and disappointing Chinese PMI. However, all of these shouldn’t affect the EURUSD all that much as analysts are projecting the instrument to continue moving higher. Further EUR strength is not ruled out but upward momentum appears to be struggling and the risk of a top has increased. Unless EUR surges above 1.2309 and stays above this level within these few days, the odds for further EUR strength would diminish quickly.
On the downside, a break of 1.2170 (‘strong support’ level) would indicate that EUR could consolidate and trade sideways for a period of time. However, in order for the EURUSD to reach that level, the 1.2210 must be taken out, and it too seems to be a strong support.
Current Market Sentiment: Neutral.
Gold Reaches New Eight Week High
Gold reached a new eight week high at $1,926. This comes on the back of a weakening dollar demand as well as over concern of another global recession coming. However, it would seem that the yellow metal has not been able to break above the mentioned resistance yet, with the USD gaining some momentum.
Gold is trading at $1,923 per ounce as of this writing. That's the highest level in nearly two months. The daily chart shows the metal is breaking out of a five-month falling channel represented by trend lines connecting Aug. 7 and Nov. 9 highs and Sept. 24 and Nov. 30 lows. The precious metal needs to close the day above the $1,900 in order to prove the breakout has merit. Should that come to pass, the next target for Gold would be at $1,965 which is November 9 high.
The 14-day Relative Strength Index (RSI) has already breached resistance at 62.00 in favor of the bulls. The bias would turn bearish if the higher low of $1,857 created on Dec. 23 is breached. Looking at the 2-hour RSI, we can see some overbought conditions as the indicator is printing around the 80 level, so we might be seeing a pull back on the Gold before either a consolidation or reversal happens.
Current Market Sentiment: Cautious bullishness.
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