The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 24.08.2021
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The market is still being controlled by the COVID-10 woes. However, the current FDA acceptance of the Pfizer/BioNTech vaccine is giving the market an added boost in the optimism that we can beat this pandemic. However, the current geopolitical tensions in Afghanistan and China do just the opposite and push the overall market sentiment downwards. With these two opposing factors, investors are now turning the economic indicators and especially the Jackson Hole Symposium for impetus.
With that said, let’s find out how the markets are doing on August 24th, 2021.
Bitcoin Faces Resistance Above $50,000
Bitcoin price continued to rise to $44,000 during the weekend trading session. As expected, the instrument was able to trade higher than $48,000 which resulted in additional profit as buyers expected that the price of the BTC will continue to increase past the $50,000, which it did. When looking at the MACD (Moving Average Convergence Divergence), judging by the daily chart, shows an optimistic outlook. This happened after the sell signal given in the middle of last week was canceled.
Currently, the 12-day exponential moving average (EMA) remains above the 26-day EMA, increasing the bullish influence on the market. According to the Relative Strength Index (RSI), Bitcoin is not overbought yet. This technical indicator tracks the trend of an asset and measures its strength. RSI is also highlighted when an asset is oversold or overbought. With the RSI brushing shoulders with 70, it means that bulls still have room to explore. Further support, preferably above $50,000, will be critical to the sustainability of the uptrend. Investors are now eyeing $60,000, and analysts fear that this will lead to a dual model.
This technical pattern is very bearish, and we can see a significant drop in Bitcoin. It should be admitted that Bitcoin is currently facing extreme greed among investors. The Fear and Greed Index remains at 79, indicating FOMO (fear of missing). When investors get too greedy, the market drops. Therefore, caution is required when dealing with the extremes of greed. Meanwhile, a failure to hold support above $50,000 could lead to increased overall pressure. The next expected support at $48,000 will soften the downtrend, giving the bulls another chance at moving above $50,000.
Current Market Sentiment:Bullish
EURUSD Seeks to Break Above 1.1750
EUR/USD struggled to extend its two-day recovery from 1-year low, shedding 0.06% around 1.1735 during Tuesday's European session. The instrument has been able to rise due to the dual effect of risk-on mood as well as a softer Dollar. However, the most recent news concerning geopolitical tensions and COVID-19 woes are creating some headwinds which might push the instrument back down. Among the main catalysts are the lack of clarity in the context of the spread of the virus and geopolitical problems related to Afghanistan and China.
New Zealand Prime Minister Jacinda Ardern warned of the further spread of the Delta virus. At the same time, the number of daily hospitalizations in the UK has risen to the monthly limit, while data from the US is also putting pressure on the Biden administration to accelerate vaccinations. While the mentioned factors have weighed on EUR/USD prices, the hopes of faster vaccinations and fewer odds favoring the Fed’s tapering help the pair buyers to remain positive.
On the daily chart, after a peak at 1.1908 on July 30, the pair came under strong selling pressure. The downtrend line from the specified level acts as a barrier for the Bulls. If the price breaks and holds below the session low at 1.1693, it could continue to correct towards the horizontal support at 1.1670. Any fall in MACD could lead to levels that were last seen in November 2020. Alternatively, if the price continues to move up, a pullback to the horizontal resistance level of 1.1715 is possible. The price action will then head towards the high reached on Aug. 18 at 1.1742, followed by horizontal resistance at 1.1760.
Current Market Sentiment:Bullish
Gold Just Inches from $1,800
Gold now appears to have entered a bullish consolidation phase and is finding itself hovering in a tight trading range, near the two and a half week highs reached on Monday. Market risk is currently hovering above the $1,800 mark and has proven to be a major driver of investor comfort after the FDA issued full approval for the Pfizer / BioNTech COVID19 vaccine, as evidenced by the overall positive result. The tone in the stock market and underpinned by a moderate recovery in US Treasury yields, further limiting gold gains is unprofitable.
Meanwhile, fears that the rapidly spreading delta variant of the coronavirus could undermine the global economic recovery, increasing fears of an impending decline in Fed asset purchases, leading to the loss of the dollar. The US dollar fell well below the nine-and-a-half-month high reached Friday and provided some support to the dollar. Investors also seemed reluctant to place any aggressive bets, rather preferring to wait on the sidelines ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium.
Even from a technical standpoint, positive overnight movement stalled right ahead of the 100-day and 200-day simple moving averages (SMA). This makes it prudent to wait for some subsequent purchases before traders begin to position any further upward movement. The three-month downtrend line is challenging the short-term uptrend in gold around $1806. However, sustained trading outside the horizontal zone, including the end-June low of around $1,752, along with bullish MACD signals, gives gold buyers hope.
Current Market Sentiment:Bullish
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