Sea of red in crypto fuelled by profit-taking
The US dollar rose today as investors continued to worry about the rising number of coronavirus cases in China, Europe, and the United States. In China, the country's leaders have announced a lockdown in Hebei, a province neighbouring Beijing. It has more than 11 million residents. Similarly, in the UK, the Boris Johnson administration is said to be considering further lockdowns as the new strain spreads. The dollar is also rising as Democrats begin their impeachment proceedings against Donald Trump after last week's riots.
It was a sea of red in the cryptocurrency market as investors rushed to take profit after the triple-digit rally. The price of Bitcoin dropped by more than $5,000 while Ethereum fell by more than $200. Other currencies dropped by more than 10%, pushing the total market capitalisation of the currencies below $1 trillion. In a note to investors, Scott Minerd, the Chief Investment Officer (CIO) at Guggenheim Partners said that the recent rally has been unsustainable.
The Australian dollar rose against the New Zealand dollar after the relatively strong retail sales from the country. It nonetheless fell against the US dollar. In a report, the country's bureau of statistics said that retail sales rose by 7.1% in November after rising by just 1.4% in the previous month. This increase was better than the consensus estimates of 7.0%. It was driven primarily by the strong performance in Victoria, which was previously in lockdown. The currency also reacted to the strong inflation date from China.
The AUD/NZD pair rose to an intraday high of 1.0738, which was the highest level since November 9. On the four-hour chart, this price rose above the 61.8% Fibonacci retracement level. It also moved above the 25-period exponential moving average and the previous resistance at the 1.0723 level. It is also slightly above the rising trend line. Therefore, the pair will likely continue rising as bulls target the next resistance at 1.0760.
The EUR/USD pair dropped to an intraday low of 1.2162, which is the lowest it has been since the last week of December. The price remained slightly below the 25-period and 15-period moving averages. It also declined below the 23.6% Fibonacci retracement level. Importantly, the MACD has moved below the neutral level while the RSI has moved to the oversold level. Therefore, the pair will possibly continue falling as bears target the next resistance at 1.2100.
The ETH/USD pair dropped to an intraday low of 1,000 as part of the general sell-off in cryptocurrencies. It is now trading at 1,112. On the four-hour chart, the price is still above the 25-day exponential moving average while the RSI has continued to drop. The Stochastic oscillator is slightly above the oversold level. Therefore, the outlook of the pair is neutral. A move below today's low will mean that there are more bears in the market, which will push the price lower. A move above 1,200 will be bullish.