With a raft of corporate and economic data due to hit the markets this week, price moves over the last week across various asset groups have been relatively quiet. The additional price volatility forecast could trigger moves in certain asset groups, particularly the cryptos, which appear to be struggling to maintain their record highs.
|Instrument||19th April||26th April||Hourly||Daily||% Change|
|GBP/USD||1.3870||1.3924||Strong Buy||Strong Buy||0.39%|
|FTSE 100||7,031||6,926||Strong Buy||Strong Buy||-1.49%|
|S&P 500||4,180||4,180||Strong Buy||Strong Buy||0.00%|
|Silver||2,603||2,597||Strong Buy||Strong Buy||-0.23%|
|Crude Oil WTI||63.19||61.45||Strong Sell||Strong Buy||-2.75%|
The calm before the storm?
The General Market This Week
Crude’s +2% slump over the week can be balanced against it experiencing a multi-month surge in price. Metals and equity indices all lost ground despite technical indicators pointing towards upwards price movement. Concerns about the scale of the Covid outbreaks in India and Japan weighing on gold in particular, with the Asian subcontinent being a significant retail market for the metal.
Bitcoin’s slide to $52,000 involved three days of trade printing below the psychologically important $50k level. It does appear to have found support at the 100 Daily SMA, but the 50 SMA, which provided support for more than 12 months, will now come into play as a resistance level.
Bitcoin Daily Price Chart – New SMA Support?
What Does Bitcoin’s Price Slide Tell Us About the Broader Market?
A certain degree of crypto buying pressure can be attributed to speculative investors. Buying something just because it’s going up might not be out of the traditional playbook, but many have made impressive returns by doing so.
With global central banks and governments operating loose monetary and fiscal policies, that money has to go somewhere, and crypto has been that place since the start of the year.
The US Federal Reserve will give its six-weekly update to the markets on Wednesday. While there is unlikely to be any change in interest rates, any hint of a shift in tone would catch the markets off-guard. Equities and forex would be vulnerable to a price shock, but cryptos could also see prices move south. If the extra volatility associated with Bitcoin, Ethereum and Dogecoin cause prices to break the 110 Daily SMA, the path of least resistance would appear to be downwards.
Bitcoin Weekly Price Chart – 20 SMA
The Bitcoin Weekly 20 SMA currently sits at 45,350.
Bitcoin Weekly Price Chart – Fibs Coming into Play
Bitcoin’s 38.2% Fibonacci retracement is below that level. At $41,577, it opens the door to a test of the ‘big number’ support at $40k. Nothing can be discounted, especially not a price surge in the other direction. However, Bitcoin is the market to watch this week.
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