The Daily Cryptomenon
12th 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 12.1.2020
Bitcoin fell towards $30,000, however it has managed to regain some composure as it aims back towards the $40,000. While the EURUSD has continued to face extreme bearish pressure as the mounting fundamentals and overall bearish atmosphere also affected Gold. Currently, the situation lies with how things play out with Trump’s second impeachment trial.
With that said, let’s find out how the markets are doing on January 12th, 2021.
The Cryptocurrency King suffered major losses yesterday. Bitcoin has previously recorded a high of $42,000 but with the surge in the U.S. Treasury Bills and the strength of the USD, the instrument began to fall, breaking through several important supports. The drop extended as Bitcoin reached $30,000 before staging a comeback as it rose back higher towards $36,100. Currently, it seems to be battling against the 100-SMA (Simple Moving Average) on the 2-hour chart.
The bearish momentum continues to play a dominant role in the EURUSD market. The currency pair has suffered greatly on the hands of the current fundamental situation and seems on par to continue going lower. The instrument broke through the $1.2170 support level and even reached $1.2130 before setting around $1.2150. Currently, EURUSD is going to continue lower even though the RSI (Relative Strength Index) on the 2-hour chart is showing oversold conditions.
Gold has been struggling lately as we’ve pointed out in previous articles. The U.S. Treasury Bills have been increasing in yield which in turn affects the precious metal negatively, however, it would seem that the instrument might be gaining some bullish momentum as it attempted to break above the $1,860. This level was acting as an important support, now, however, it has turned into a resistance, so breaking higher could re-establish it as a support and help the yellow metal higher.
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 Reaches $30,000
After breaking below the $35,000 support yesterday, Bitcoin encountered heavy bearish movements, enough that the Cryptocurrency declined over 25% and it even broke the $32,000 support zone. The carnage didn’t stop there as BTC traded close to the $30,000 level. A low was formed near $30,359 and it seems like the Bulls remained in action above $30,000. There was a strong recovery wave from the $30,359 low and the price climbed above $32,000.
Currently, the instrument is facing extreme resistance around the 100-SMA on the 2-hour chart which coincides with the $36,300 level. In order for Bitcoin to regain some kind of composure and consolidate after this volatile move, it needs to establish a base around the mentioned level.
To start a fresh rally towards the $40,000 level, Bitcoin must be able to close above the $36,300 resistance level as well as target the $38,000 in the near term. Should it fail to do so, there’s a risk of another decline. An initial support on the downside is near the $33,800 level. The first major support is near the $32,500 level. A clear break below the $32,500 level could lead the price towards the main $30,000 support level in the coming sessions.
Current Market Sentiment:Bullish.
EURUSD Becomes Oversold
The common currency has extended its bearish movement all the way towards the $1.2130 before managing to jump higher towards $1.2150 where it currently consolidates. The RSI on the 2-hour chart is showing an extreme case of oversold conditions as it prints very close to the 30 level. When you combine the current technical atmosphere and the fundamental one, you can only deduce that the next movement on the instrument will be to the downside, definitely after a brief consolidation, though.
We had expressed that the EURUSD is most likely to weaken to 1.2150, which it did, we just did think it would continue to fall. We also indicated that the next support at 1.2125 is likely out of reach, as the instrument managed to bounce from the 1.2130. While the rapid decline is oversold, there’s room for EUR to test 1.2125 first before stabilization can be expected. For today, the next major support at 1.2080 is not expected to come under threat. Resistance is at 1.2180 followed by 1.2205.
The rapid pace of decline suggests that the chance for EUR to move to 1.2080 has increased. Overall, the current downward pressure in EUR is deemed intact as long as it does not move above 1.2250 (strong resistance).
Current Market Sentiment: Consolidating with Bullish Bias.
Gold Looking for More Gains
Gold edged higher through the Asian session and was last seen hovering near the top end of its daily trading range, around the $1860 region. The precious metal built on the previous day's bounce from over one-month lows, around the $1817 region and gained some positive traction during the first half of the trading action on Tuesday. The uptick allowed the XAUUSD to snap four consecutive days of the losing streak, though a combination of factors might keep a lid on any runaway rally.
The US dollar was seen consolidating its recent strong gains, which, in turn, was seen as one of the key factors that extended some support to the dollar-denominated commodity. This, along with political turmoil in Washington and growing market worries about the continuous surge in new coronavirus cases worldwide, further underpinned the safe-haven XAU/USD.
Even from a technical perspective, last week's sustained breakthrough a rising wedge might have already shifted the near-term bias in favour of bearish traders. This further makes it prudent to wait for some strong follow-through buying before confirming that the XAUUSD has bottomed out and positioning for any further appreciating move.
Current Market Sentiment: Consolidating with Bearish Bias.
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