Financial markets take a turn lower over new COVID-19 mutation

Sentiment hit

Financial markets turned heavily into the red at the start of the trading week after the United Kingdom announced that a new fast spreading COVID-19 mutation had surfaced in London. Global stock markets turned heavily negative on the weekly open, with traders flocking into the safety of the greenback and gold. British PM announced that the capital city of the United Kingdom was to go into a Tier 4 lockdown, which effectively cancelled Christmas for millions of Londoners, and provoked fears that the new variant of the COVID-19 virus could spread across to Europe and the United State. The British pound took a substantial hit and later recovered, while the FTSE 100 slumped to a four-week trading low.

• The FTSE 100 is only bullish while trading above the 6,480 level, key resistance is found at the 6,640 and 6,700 levels.
• The FTSE 100 is only bearish while trading below the 6,480 level, key support is located at the 6,310 and 6,270 levels.

Bitcoin $24,000

Bitcoin incurred a major bout of trading volatility this week, as the pioneer cryptocurrency hit a new all-time high, around $24,300, and then dropped by $2,500. Bitcoin suffered due to market jitters about the new strain of COVID-19, although the BTCUSD pair quickly recovered as institutional money continued to pile into Bitcoin. Grayscale Investments Trust announced that they had purchased $16,000 Bitcoins this week, while SkyBridge Capital announced that they are starting a new $25 million Bitcoin fund. Bitcoin started to consolidate between the $22,000 to $24,000 levels as traders awaited news about the US crypto regulation and the US stimulus bill

• The BTCUSD pair is only bearish while trading below the $22,400 level, key support is found at the $21,400 and $20,000 levels.
• The BTCUSD pair is only bullish while trading above the $22,400 level, buyers may test towards the $24,000 and $25,000 resistance levels.

Altcoin volatility

The altcoin space incurred a huge amount of trading volatility this week, with a number of top coins trading in an increasingly large price range. Ripple lost more than fifty percent of its value this week after the SEC announced that they were launching a legal case against the third largest crypto. Etheruem also traded on the backfoot alongside Litecoin, with both coins repeatedly sold as they continue to closely track Bitcoin’s price movements and failed to produce new yearly price highs.

• The ETHUSD  pair is only bearish while trading below the $600.00 level, key support is found at the $570.00 and $500.00 levels.
• If the ETHUSD pair trades above the $600.00 level, buyers may test towards the $670.00 and $770.00 resistance levels.

Stimulus drama

Financial markets went into the Christmas period with a new uncertainty about the freshly announced COVID-19 stimulus packaged after President Trump suggested that he would veto the $900 million spending bill. Market optimism quickly fizzled, as President Trump remained deeply unhappy about the proposed $600.00 going to US citizens. President Trump was displeased with the parts of the bill, including Foreign Aid spending inside the stimulus package. Market sentiment remained fragile going into the festive season, as traders and investors had expected the stimulus bill to be passed into law this week.

• The EURUSD pair is only bearish while trading below the 1.2130 level, key support is found at the 1.2000 and 1.1940 levels.
• The EURUSD pair is only bullish while trading above the 1.2130 level, buyers may test towards the 1.2300 and 1.2400 resistance levels.