The Daily Cryptomenon
11th 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 11.1.2020
With Treasury Bills in the U.S. on the rise, we see that Bitcoin, EURUSD, and Gold have all begun to turn and move lower. Bitcoin wasn’t able to break above the $42,000 and continued to move lower; the EURUSD fell due to the probability of stimulus plans in the U.S.; Gold began the trading week weak and couldn’t manage to move higher due to USD demand.
With that said, let’s find out how the markets are doing on January 11th, 2021.
It was only a matter of time if you ask us, the Cryptocurrency King has been in an extraordinary bullish run that had it move from the $19,000 all the way towards the $42,000. However, recently that level hasn’t been allowing any more major moves higher as the instrument fell, marking its first fall in quite some time. Bitcoin couldn’t surpass the mentioned resistance and fell towards the $33,000, however, that level might break soon enough given the bearish pressure on this instrument.
The EURUSD has also suffered from overwhelming bearish pressure as the instrument seemed to tumble from the $1.2270 resistance level towards the $1.2170 support. This comes on fresh hopes of a stimulus plan from the U.S. government to help those affected by the pandemic and lockdown. The effect was short bets on the USD have decreased, giving a boost in the USD which in turn affected the currency pair negatively.
Gold took a major beating as the major rebound in the USD has taken its toll on the yellow metal. Gold had fallen from the $1,910 all the way towards the $1,816 before rebounding slightly. This comes on the back of increased probability of a stimulus package after the Democrats have secured both houses of Congress. The Treasury Yields have risen tremendously as the un-yielding yellow metal suffered the consequences, however, it’s not alone in that boat as all safe-havens suffered from as of this.
What’s the strategy you’re going to use when it comes to trading these markets? Will the U.S. Treasury Yields continue to push these instruments lower? Or is this but a speed bump on a rather bullish run?
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 Corrects Lower
After forming a short-term top near the $42,000 level, Bitcoin price started a downside correction. BTC broke a couple of important supports near the $40,000 level to start the current correction. There was also a break below a key contracting triangle with support near $40,000 as the instrument managed to settle below the $38,000 level and the 100-SMA (Simple Moving Average) on the 2-hour chart.
However, the Bulls were seen active near the $35,000 support zone (the last key breakout zone). The next major support is near the $34,500 level. Unfortunately, even that level couldn’t handle the bearish pressure that’s currently mounting on the instrument as it currently faces off against the $33,300 support level. Breaking below that would force the instrument to face the $30,000 which is currently seen as the major support as it would signify the end of the bullish run for Bitcoin.
The only way that the bullish momentum can return is if Bitcoin manages to reclaim the higher levels around $34,500 and $35,000. Looking at the current structure, Bitcoin will face heavy resistance at the $37,800 level which might extend towards the $38,000, however, a daily close above those levels would signify that the bearish pressure has ended which can give a chance for Bulls to reestablish the move higher. Yet, there will be a lot of levels on the top side which might hinder any movement.
Current Market Sentiment:Bearish.
EURUSD Falls on Stimulus Plan
The latest run-off elections in Georgia helped Democrats control both houses of Congress, meaning that there are a lot of plans that are going to pass to help the U.S. citizens through much needed stimulus packages. This gave the U.S. Treasury Bills an increase in their yields, this in turn gave the USD Bulls the needed momentum to push the currency higher and in turn that pushed the EURUSD lower as we saw.
The EURUSD dropped to $1.2190 before extending its decline this morning. Downward momentum is beginning to improve and EURUSD is likely to weaken even further to $1.2150. The next support at $1.2125 is likely out of reach with resistance making itself known around $1.2225 and followed by $1.2250.
The bullish run on EURUSD has ended and is expected to trade between $1.2195 and $1.2350 for a period of time. The rapid manner by which EUR moved below the bottom of the range came as a surprise. The price actions suggest the current movement is likely part of a deeper pull-back. From here, there’s room for EUR to weaken to $1.2125. Extension to $1.2080 is not ruled out but at this stage, the odds for such a move aren’t high. Overall, EUR is expected to trade under pressure unless it can move above $1.2280 (‘strong resistance’ level).
Current Market Sentiment: Bearish.
Gold Falls Even Further
Gold is on the downside, with the dollar charting an oversold bounce alongside an uptick in Treasury yields. The safe-haven yellow metal is trading at $1,845 per ounce at press time, representing a 1% loss for the day. Prices fell to $1,817 as the trading day began to hit the lowest level since December 2nd. Gold's biggest nemesis, the dollar index, which tracks the greenback's value against majors, jumped to more than two-week highs near 80.40 early today, extending the rebound from the multi-year low of 89.21 reached last Wednesday.
The greenback looks to be tracking the US Treasury yields. The 10-year yield jumped more than 20 basis points to 1.12% last week. Meanwhile, the yield curve, as represented by the spread between the 10- and two-year yields, steepened to the highest level since 2017.
Besides, a rise in borrowing costs is considered bearish for gold, a zero-yielding inflation hedge. A continued rise in yields could have a bearing on equity markets, leading to a more substantial bounce in the US dollar. However, haven demand may restrict gold's losses.
Current Market Sentiment: Bearish.
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