Bitcoin stages recovery after crashing to $30,000
Bitcoin had another wild week of trading action on the cryptocurrency market after the BTCUSD pair crashed towards the $30,000 level and then recovered back to $40,000. The reason behind the price decline was attributed to BTC miners selling their Bitcoins for huge profits and record high mining difficulty rates. Other reasons for the sell-off included an outage on the crypto exchange Coinbase, and also new crypto regulations from the United Kingdom. Bitcoin managed to recover back towards the $40,000 resistance level as on-chain data showed that institutions and whales continued to buy Bitcoin during the latest price pullback towards the $30,000 level.
- The BTCUSD pair is only bearish while trading below the $34,000 level, key support is found at the $32,000 and $30,000 levels.
- The BTCUSD pair is only bullish while trading above the $34,000 level, buyers may test towards the $40,000 and $45,000 resistance levels.
Traditional financial markets continued to see the trading action dominated by the moves in the US bond market this week. US 10-year yields continued to track higher over-optimism towards the stimulus package that Joe Biden announced this week. Market volatility was seen inside the bond market as the 10-year and 30-year auctions in the United States continued to attract significant interest. As the 10-year yield continued to rise on the bond market traders bought the US dollar currency. The current theory is that the incoming US stimulus package will be bullish for the US dollar currency, and could cause the Federal Reserve to taper QE sooner than anticipated.
- The S&P 500 is only bullish while trading above the 6,480 level, key resistance is found at the 6,840 and 7,000 levels.
- The S&P 500 is only bearish while trading below the 6,480 level, key support is located at the 6,310 and 6,270 levels.
Oil markets continue to make strong upside progress this week following better-than-expected data from China and an output cut from Saudi Arabia. WTI oil traded towards the $54.00 level, while Brent crude oil touched a multi-month high, around the $58.00 level. The output cut from one of the world’s largest producers, Saudi Arabia, was seen as being bullish for oil prices in the short-term. Strength in the Chinese economy also helped the price of oil race higher as China is a major imported of oil on the global stage. Markets also feared than the Green New Deal from incoming US President Joe Biden could hurt the fracking industry in the United States, and cause US output to start to dwindle in the medium to long-term.
- WTI Oil is only bearish while trading below the $50.00 level, key support is found at the $49.50 and $48.80 levels.
- WTI Oil is only bullish while trading above the $50.00 level, buyers may test towards the $54.00 and $56.00 resistance levels.
Altcoin incurred a major bout of trading volatility on the cryptocurrency market this week, following the twenty percent price correction and subsequent recovery in Bitcoin. Ethereum also lost around twenty percent of its value as Bitcoin crashed, while Litecoin posted similar losses on the crypto market. Ethereum soon found strong technical support around the $900.00 level and staged a recovery back towards the $1,250 area. Litecoin also followed the top two cryptos higher after plunging towards the $100.00 support level and posted a strong recovery back towards the $150.00 benchmark level.
- The ETHUSD pair is only bearish while trading below the $800.00 level, key support is found at the $770.00 and $650.00 levels.
- If the ETHUSD pair trades above the $800.00 level, buyers may test towards the $1,300.00 and $1,400.00 resistance levels.