Bitcoin crosses $40,000 as cryptos explode

Bitcoin $40,000

Bitcoin traded to yet another all-time record high this week, as the first cryptocurrency rallied above the $40,000 resistance level. Traders continued to move into Bitcoin as institutional demand for the worlds leading digital asset spiralled and the Democrat party won control of the US Senate. Investors feared that the blue wave in the US Senate could lead to increased fiscal spending and continued depreciation of the US dollar currency. The BTCUSD pair started the week on the backfoot after US banks announced that they could hold stablecoins. Bitcoin quickly recovered and staged an incredible $12,000 rally towards the $40,000 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.

FOMC guidance

Financial markets incurred a major bout of volatility this week after the FOMC meeting minutes revealed that the central bank would be increasing guidance towards ongoing bond buying. Financial markets took this as a sign that the central bank could start to issue more clarity about removing QE4 when US economic conditions improve. The US dollar index quickly moved higher on the news, while the stock market briefly sold-off. Market participants quickly realized that the current market conditions are likely to warrant stimulus for sometime, as the ADP Private Sector jobs report recorded a negative monthly headline number. The rise of COVID-19 infections was also seen as a big concern for financial markets, as the virus continues to take its toll on the jobs and the US economy.

• The S&P 500 is only bullish while trading above the 6,480 level, key resistance is found at the 6,800 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.

Senate drama

Financial markets tumbled in reaction to protestors storming Capitol Hill this week after the Georgia run-off confirmed that the Democrat party had control of the US Senate. Financial markets incurred significant volatility earlier in the week, with the VIX spiking in reaction to traders dramatically repricing financial assets as the prospects of the Democrats gaining control of the US Senate seemed increasingly likely. Financial markets soon regained their composure and went on to move to new 2021 trading highs, with the Nasdaq hitting an all-time record high. The FTSE 100 was one of the best performing global indices this week and surged towards the 6,900 level after oil stocks inside the index rallied on the news of a Saudi Arabian oil output cut.

• 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 1.2340 and 1.2400 resistance levels.

Ethereum breaks $1,200

Ethereum hit a new multi-year high this week as institutional and retail investors continued the move into the second-largest cryptocurrency. Ethereum moved within touching distance of the $1,300 level this week, although bulls were unable to break the all-time record high, of $1,420. Ethereum is closely linked with the fortunes of Bitcoin and tends to rise when the BTCUSD pair is trending higher. Trades also turned bullish towards Litecoin this week and sent the LTCUSD pair towards the $180.00 level. Investor interest towards both Litecoin and Etheruem has grown since PayPal included both cryptocurrencies in its recent digital asset payment offering.

• 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.