The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 16.08.2021
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The market is experiencing some risk-off sentiment, which should be good for the USD, allowing it to increase its safe haven bet. However, the negativity coming from the US side is making things harder for the green currency. In turn, this has allowed instruments to rise significantly, and the EURUSD and Gold were the main benefactors, as they are currently consolidating the gains they made. Bitcoin, on the other hand, continues to find added bullish pressure to carry on with moving higher.
With that said, let’s find out how the markets are doing on August 16th, 2021.
Bitcoin Finds Bullish Sign
Over the weekend, the price of Bitcoin took another step towards the $50,000 level. While last week, trading stopped at $47,000, when the Bears had drawn the line in the sand. The subsequent correction caused BTC to fall below the $45,000 support level, as shown by the 200-day simple moving average (SMA). However, the backlog of buyers at $44,000 paved the way for a new rebound, allowing the instrument to rise towards the $48,000 level. Still, the support of SMA 200 remains essential to resume the upward trend.
At the time of writing, the leading cryptocurrency is trading at $47,415. However, with the current structure, the $48,000 is acting as a strong resistance to the instrument. Trades above this level may push Bitcoin up to $50,000, and a hard fight from the Bulls is expected. A breakthrough of $50,000 may generate huge profits, as investors speculate that it may soar to $60,000. According to the RSI (Relative Strength Index), the instrument has hit overbought territory, meaning that there is still some room for another push higher, hence the projection to $60,000.
On the other hand, the Moving Average ConvergenceDivergence (MACD) is still bullish. Therefore, Bitcoin will have an undeniable opportunity to fight against the $60,000 level. A comprehensive review of the daily chart shows that the moving average is close to a bullish pattern. When the 50-day SMA crosses the 100-day SMA, it may rise sharply beyond the peak. This is not a golden cross, but it does represent tighter bullish control, which could cause Bitcoin to break through $50,000.
Current Market Sentiment:Bullish
EURUSD Jumps Higher
The EUR/USD dropped from its weekly high of 1.1790 after its longest gain in 12 weeks on Friday, as the Monday European trading session kicked off. Although traders are worried about the recovery of the US economy, this triggered the mentioned jump in the pair as the risk-off mood in the market puts bearish pressure on the USD. Furthermore, the growing concern about the COVID Delta Variant may be related to the recent market risk aversion and the corrective fall in the U.S. dollar.
The United Kingdom and the Eurozone have recently reported fairly minimal virus figures. However, the recent disappointment of retail sales and industrial production in China, and the fall of the Michigan Consumer Confidence Index to a 10-year low on Friday, has kept a lid on the risk-off sentiment. In addition, the European Central Bank (ECB) and the US Federal Reserve System (FRS) discussions on monetary policy adjustments have confused traders of the EURUSD.
The latest Reuters survey shows that the European Central Bank could be looking at some monetary easing in Q4. In addition, Minneapolis Federal Reserve Chairman, Neil Kashkari said, “He hopes to see some more reliable labor market reports soon”. Viral issues affecting the economic recovery may continue to weigh on the euro/dollar price on a weak calendar, but any major negatives for the US may push the greenback gauge to follow US Treasury yields and reverse the Asian session pullback.
Current Market Sentiment:Bullish
Gold Flirts with $1,780
There seems to be a lack of strength in the gold market preventing it from making any decisive movements. The price opened higher but did not maintain its momentum and was under pressure near $1,780. The University of Michigan Consumer Confidence Index fell to 70.2 in August, far below the market’s forecast of 81.2 growth. Multiple factors have also put pressure on the yellow metal with the recovering of the USD index, the recent Chinese economic situation, the rising global stock markets and the lack of ETF purchases by investors who also put pressure on the precious metal.
The trading price of XAU/USD is $1,779.16, which has remained untouched since the price change on Friday. Analysts who discussed the movement have deduced that after the decline of the consumer confidence in the United States, gold took advantage of the decrease in dollar on Friday to stimulate demand for a safe haven for metals. The price of gold has fallen towards the trend line that defines the bull market, which triggered an epic but short-lived surrender.
Analysts also said that these gold short traders have never existed in such low quantities, which indicates that dry dust may also have a negative impact. A higher correction in the price of gold can only indicate a technical correction. At the same time, analysts will use US data as a guide before the Jackson Hole meeting on August 26. Traders will also be focused on the US Retail Sales on the 17th and the FOMC Minutes on the 18th.
Current Market Sentiment:Consolidation
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