The Daily Cryptomenon
5th 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 can safely say that the market in general has had a good start for the year. We’ve seen how Bitcoin continued to rise up to the occasion and deliver on those higher all-time highs, EUR has been able to defend its current position, and Gold breaks above it’s 8-month highs, so price wise, things are looking up.
With that said, let’s find out how the markets are doing on January 5th, 2021.
The extreme bullish behavior on Bitcoin that we’ve seen almost since November 2020, has been having a lot of ups and downs as momentum fades and then resurges higher with avengeance. Investors and Traders alike have jumped on this bandwagon as FOMO (Fear Of Missing Out) captures their trading minds. Bitcoin has managed to reach the All-time high of $34,810 before encountering heavy resistance which caused it to fall towards the $27,680 support level before jumping back towards the $33,000 which is now acting as the main resistance to beat, also the $30,000 is acting as the main support to beat.
While not as attractive or as flashy as Bitcoin, EURUSD has been battling against the $1.2280 resistance level as the $1.2310 is acting as the level to beat for Bulls. Yesterday, we saw how the instrument fell from that level after attempting to break above it twice and failing, with the last fall leading it towards the $1.2240 before moving higher. This whole setup shows indecisiveness on the EURUSD’s part and could mean the start of a consolidation phase. Currently the 100-Simple Moving Average (SMA) on the 2-hour Chart is the skirmish line for Bulls and Bears.
Gold Managed to continue to move higher yesterday, confirming the breakout that we spoke about. This means that the Bulls have control over this market for the time being. The precious metal was able to reach the high of $1,945.70 before losing the momentum it had. It is currently consolidating the gains around the $1,940 mark as the RSI (Relative Strength Index) has been showing extreme overbought conditions on the instrument.
What’s the strategy you’re going to use when it comes to these markets? Has the bullishness reached a turning point? Or will the market simply power through and set up new highs?
Whatever you choose to believe, you can react to it all on CryptoAltum. Go ahead and register a trading account right here if you don’t already have one.
Bitcoin Continues With Positive News
Yesterday, Bitcoin’s price saw a sharp downside correction below the $32,000 support zone. BTC broke many important supports near $30,000 and it even spiked below the 100 hourly simple moving average. It declined nearly 20% from the high and tested the $28,000 support zone. A low was formed near $27,967 before the price started a fresh increase. There was a steady rise and the price recovered above the $30,000 level.
More importantly, there was a break above a major bearish trend line with resistance near $32,350 on the hourly chart of the BTC/USD pair. The pair is now back above $31,000 and trading nicely above the 100 hourly simple moving average. The next key resistance could be near the $35,000 zone.
If Bitcoin fails to clear the $33,200 and $33,500 levels, it could start a fresh downward move. An initial support on the downside is near the broken trend line and $32,200. The first major support is near the $31,400 level and the 100 hourly simple moving average. A close below the 100 hourly SMA could start a steady decline towards the $30,000 level or even $29,500 in the near term.
Current Market Sentiment:Neutral.
EURUSD Struggles Against 1.2300
EUR/USD failed to keep gains above 1.23 for the third consecutive trading day on Monday. The repeated rejection above the psychological level, coupled with the bearish divergence of the 14-day Relative Strength Index (RSI) and the negative or bearish reading on the daily chart MACD histogram suggests scope for a pullback.
The breakout could happen if Democrats sweep the Georgia elections for both Senate seats due on Tuesday. That's because a Democrat-controlled Senate could pave the way for more significant fiscal stimulus, according to Goldman Sachs. Further, the market is currently pricing a Republican win in at least one race.
At press time, the pair is trading near 1.2272, representing a 0.19% gain on the day. The dollar came under pressure in Asia after the US Food and Drug Administration said that two different mRNA vaccines now show remarkable effectiveness of about 95% in preventing Covid-19 infection in adults.
Current Market Sentiment: Neutral.
Gold Rallies Toward $1,940
Gold (XAU/USD) holds below the critical $1947 barrier heading into Tuesday’s runoff elections in Georgia. Gold buyers remain hopeful of Democratic control of Congress, as it implies an easier path for President-elect Joe Biden to push for additional fiscal support.
An increase in inflows into gold ETFs combined with a surge in coronavirus cases-led fresh lockdowns also keeps the metal underpinned. Let’s look at the key technical levels for trading gold in the lead up to the critical Georgia vote.
Only a sustained break above the latter could unleash the further upside, with immediate resistance aligned at $1952, the Bollinger Band four-hour Upper. The next upside target for the buyers is seen at $1958, where the pivot point one-day R1. Further south, the $1929 cushion could limit the declines. That level is the Fibonacci 38.2% one-day. Meanwhile, strong support of the pivot point one-week R2 at $1921 will be the level to beat for the bears.
Current Market Sentiment: Consolidating.
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