The Daily Cryptomenon
13th 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 13.1.2020
We had clarified yesterday the situation Bitcoin has found itself in. After falling towards the $30,000 level, it managed to bounce back towards the $36,000 and the 100-SMA (Simple Moving Average) on the 2-hour chart, which acted as a resistance pushing the instrument back down towards the $33,000. The Cryptocurrency is currently trading around that level with support seen at $32,500.
In a big change in trajectory, the common currency found enough bullish momentum around the support level of 1.2130 to stage a comeback. After falling towards the mentioned support level, EURUSD was consolidating its losses as it tried to gain some momentum to push higher. However, once it was able to break above the first resistance level at 1.2175, the bullish momentum took hold and moved it higher towards the 1.2220 where it currently consolidates.
The precious yellow metal continues to struggle in finding proper bullish momentum to continue moving higher. Yesterday was very volatile for Gold as it attempted to break above the $1,865 resistance level but failed, the result was a $25 move lower towards the $1,840, before rising back higher. However, during the Asian session, consolidation was playing the main role as it seems to be seeking to repeat yesterday’s failed attempt.
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Bitcoin Recovers Slightly
The move higher on Bitcoin happened after there was a strong bounce from the support level around $30,000. BTC was able to surpass the $32,000 and $34,000 resistance levels to move into a positive zone. The price even spiked above the $36,000 resistance. However, there was no close above $36,200 and $36,500 (a major hurdle as discussed yesterday). As a result, there was a rejection near $36,500 and the price declined below the $35,000 level.
The rejection came from the 100-SMA on the 2-hour chart that we highlighted earlier in this brief. The rejection caused BTC to fall below the $34,000 as it currently trades around $33,900. The next major support is near the $31,700 level, below which Bitcoin might continue to move down towards the $30,500 and $30,000 levels. Any more losses could lead the price to drop towards the $28,000 support zone.
For Bitcoin to move back into a positive zone, it needs to clear many hurdles, starting with $34,600. The first major resistance for the Bulls is near the $35,000 level. The main resistance is still near the $36,000, $36,200 and $36,500 levels. A close above $36,500 is likely to start a fresh rally towards $39,200 and $40,000 in the near term.
Current Market Sentiment:Bearish.
EURUSD Bounces Higher
The common currency finds itself with quite the bullish momentum as it managed to bounce from the 1.2140 support level towards the 1.2220 resistance level. With that said, the EURUSD still remains at risk of another fall below the mentioned support. The current structure of the price action suggests that the instrument might be losing the bullish momentum. The RSI (Relative Strength Index) on the 2-hour chart isn’t showing any overboughtness, but it’s showing a decrease in momentum as it prints around the 60-level. In order for the EURUSD to find its way higher, it must break above 1.2220 or we could be seeing another move lower.
We expressed yesterday how the rapid decline is oversold but there is room for EUR to test 1.2125 first before stabilization can be expected. However, EUR didn’t quite test 1.2125 as it rebounded strongly from 1.2135 to an overnight high of 1.2209. The rapid rise appears to be running ahead of itself but further advance is not ruled out. That said, a clear break of the ‘strong resistance’ at 1.2250 is unlikely (next resistance is at 1.2280). Support is at 1.2180 followed by 1.2155.
The EUR/USD pair is still at risk of falling, despite trading near its daily highs in the 1.2220 price zone. Technical indicators have recovered further from oversold readings, but have lost directional strength within negative levels, indicating limited buying interest. Additional declines are more likely on a break below 1.2125, the immediate support level.
Current Market Sentiment: Neutral with bearish signs.
Gold Looking Like Pyrite
It hasn’t been a fortuitous start for the year for gold prices, which just endured a loss in excess of -2.5% during the first week of the year, and staged an unimpressive bid higher in the second week of 2021. The dominant factor remains US Treasury yields, but this time, instead of leading to an erosion of US real yields propping up gold prices, the script has been flipped. Rising US real yields have been weighing on gold prices, as several short-term risks coincide.
We were previously looking for gold prices to make one more significant bullish achievement before declaring the downtrend done, but were patient insofar as gold prices had “have not yet cleared the November swing high at 1965.57.” Instead, gold prices were slammed lower last week, falling short of the November 2020 swing high but dropping back into the downtrend from the August and November 2020 highs. It may as well be the case that we’ve witnessed a failed bullish breakout attempt in gold prices.
Support has been found at a confluence of technical levels. Including the rising trendline from the March and December 2020 lows, which already proved itself once again during the decline at the start of this week. Gold prices are also finding support in the form 1832.48, as well as 1836.97. Failure below these levels by the end of the month would warrant a more serious consideration of a bearish breakdown developing in gold prices.
Current Market Sentiment: Consolidating.
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