Quick Facts
Market Sentiment Snapshot: Global Indices, Currencies, Cryptocurrencies, and Key Economic Indicators
Price Analysis 1/20: Market Chaos as Trump’s Comments Cause Crypto and Stock Volatility
The financial markets experienced a rollercoaster ride last week, with President Trump’s comments on the economy sending shockwaves through both the stock and crypto markets. The Dow Jones Industrial Average (SPX) and the US Dollar Index (DXY) saw significant fluctuations, while the cryptocurrency market recorded a sharp sell-off. In this article, we’ll dive into the price analysis of various assets, including BTC, ETH, XRP, BNB, SOL, DOGE, ADA, and LINK.
Stock Market Volatility
The SPX, a benchmark index for the US stock market, saw a wild ride last week. On January 17th, it experienced a sharp correction, dropping over 2.5% in a single day. This sell-off was triggered by President Trump’s comments on the economy, which cast doubt on the potential for further rate cuts by the Federal Reserve.
The SPX decline was not limited to a single day, as it continued to fall throughout the week, revisiting its 200-day moving average. This level has acted as a support zone for the index since October 2020 and may provide a temporary respite for investors.
US Dollar Index
The US Dollar Index (DXY) has been trending upward since the beginning of the year, driven by expectations of further rate cuts by the Federal Reserve. However, President Trump’s comments on the economy sent the DXY tumbling, as investors hedged their bets against the dollar.
The index has been trading within a narrow range since the sell-off, indicating a lack of clear direction. As the DXY continues to consolidate, investors will be closely watching the 92.50 level, which has acted as a resistance zone in the past.
Cryptocurrency Market
The cryptocurrency market experienced a sharp sell-off last week, with most major assets experiencing significant declines. Bitcoin (BTC) dropped over 10% in a single day, erasing all its gains from the previous week. The BTC/USD pair has been trading within a narrow range since the start of the year, with the recent sell-off breaking below the 20-day moving average.
ETH, XRP, and BNB, the three largest altcoins by market capitalization, followed suit, with ETH dropping over 12%, XRP falling 15%, and BNB declining by 13%. The decline was not limited to just the top coins, with DOGE, ADA, LINK, and SOL all experiencing significant losses.
President Trump’s Comments
President Trump’s comments on the economy, which sparked the sell-off, were attributed to his statement that the US economy was “doing well” and that he was not concerned about the impact of the coronavirus on the global economy. This statement was seen as a surprise by investors, who had been expecting more dovish comments from the President.
Price Analysis
Using technical analysis, we can gauge the sentiment of the market and identify potential areas of support and resistance. Here’s a brief overview of each asset:
- BTC: The 20-day moving average at $34,300 has broken, and the 50-day moving average at $31,900 may provide a temporary support zone. If broken, the next level of support is around $30,000.
- ETH: The 20-day moving average at $1,300 has broken, and the 50-day moving average at $1,100 may provide a temporary support zone. If broken, the next level of support is around $1,000.
- TRUMP: As an event-driven asset, TRUMP’s price is largely dependent on the news cycle. There is a strong resistance zone around $50,000, which may be challenging to break in the short term.
- ETH: The 20-day moving average at $0.20 has broken, and the 50-day moving average at $0.18 may provide a temporary support zone. If broken, the next level of support is around $0.15.
- DOGE: The 20-day moving average at $0.003 has broken, and the 50-day moving average at $0.0025 may provide a temporary support zone. If broken, the next level of support is around $0.002.
- ADA: The 20-day moving average at $0.12 has broken, and the 50-day moving average at $0.10 may provide a temporary support zone. If broken, the next level of support is around $0.09.
- LINK: The 20-day moving average at $12 has broken, and the 50-day moving average at $10 may provide a temporary support zone. If broken, the next level of support is around $9.
- SOL: The 20-day moving average at $1 has broken, and the 50-day moving average at $0.90 may provide a temporary support zone. If broken, the next level of support is around $0.80.
