Cryptocurrency market volatility continues to rise in March
The cryptocurrency market remained extremely volatility this week, as Bitcoin and a number of other top cryptos traded in an increasingly large price range. Bitcoin exploded higher at the start of the week, following news that Microstrategy increased its Bitcoin holdings and the CBOE had filled with the SEC for a Bitcoin ETF. The top crypto’s positive price correlation with the S&P 500 index caused major volatility, as a decline in tech stocks caused Bitcoin to suffer a strong price pullbacks. Other cryptocurrencies such as Etheruem and Litecoin followed a similar pattern. March is considered to be the worst performing month for Bitcoin on an historical basis, with the number one cryptocurrency more likely than not to finish March in the red.
- The BTCUSD pair is only bearish while trading below the $46,500 level, key support is found at the $44,500 and $43,000 levels.
- If the BTCUSD pair trades above the $46,500 level, buyers may test towards the $52,000 and $55,000 resistance levels.
The reflation theme spilled over into the new trading month this week, as US bond yields continued to soar to multi-month highs and global stock market fell. Fears that inflation is going to be coming back to the US economy in a big way continued to prompt rising US bond yields and flight into the safety of the US dollar. Weaker-than-expected jobs data this week also caused a major meltdown in US technology stock, with the Nasdaq and the S&P 500 suffering the brunt of the selling. The ADP jobs report missed expectations, which prompted fears of a tough economic backdrop of rising inflation and an underperforming jobs market. Microsoft, Apple, Facebook, and Tesla were some of the worst affected tech-related stocks.
- The EURUSD is only bullish while trading above the 1.2100 level, key resistance is found at the 1.2200 and 1.2315 levels.
- The EURUSD is only bearish while trading below the 1.2100 level, key support is located at the 1.1860 and 1.1900 levels.
The price of gold came under heavy selling pressure again this week as the yellow-metal tumbled towards the $1,700 support level. Non-yielding metals, such as gold, were once again shunned by traders and investors as they moved into industrial metals and other commodities. Seasonality factors also dragged on gold, as the metal typically does not fare well during this partuclar time of the year. Gold has officially got-off to its worst start to the fiscal quarter in over a decade, following a major reversal from the $1,900 level since the start of the year. Silver also came under pressure this week as the shiny-metal shares a strong price correlation with gold.
- The XAUUSD pair is only bearish while trading below the $1,800 level, key support is found at the $1,660 and $1,620 levels.
- The XAUUSD pair is only bullish while trading above the $1,800 level, buyers may test towards the $1,815 and $1,825 resistance levels.
The British pound staged a recovery against the US dollar this week, following strong support from the United Kingdom Government for the domestic economy. UK Chancellor Rishi Sunak announced measures to shore-up the United Kingdom economy this week as he laid out the fiscal budget for the UK. The GBPUSD pair spiked towards the 1.4000 resistance level as Chancellor Sunak announced support for UK housing and an extension to the furlough scheme for UK workers. British Prime Minister Boris Johnson has recently set out plans for the UK economy to come out of lockdown this month, as the country continues to perform well in vaccinating its population.
- GBPUSD is only bearish while trading below the 1.4000 level, key support is found at the 1.3960 and 1.3850 levels.
- GBPUSD is only bullish while trading above the 1.4000 level, buyers may test towards the 1.4240 and 1.4350 resistance levels.