Daily Market Analysis

Bitcoin closes 2020 near record highs

XAUUSD ends 2020 hovering near $1900, with a 22% gain

Nasdaq – Market is likely to plow higher

Crude Oil – Market looking towards 50$

BITCOIN +0.36%

Bitcoin nearly triples its price in 2020 and ends the year close to $29,000 but ether gained 450%.
Bitcoin printed a new record high above $29,000 early Thursday before charting a quick pullback to $27,900 during U.S. trading hours, according to data compiled by the CoinDesk 20.
Despite the minor drop, the number one cryptocurrency by market value is eyeing its third consecutive monthly gain, a feat last achieved in the second quarter of 2019. The cryptocurrency has rallied by over 45% this month alone and ended the 2020 with over 500% gain.
The year 2020 will go down in history as the period of bitcoin maturing as a macro asset, with prominent publicly-listed companies such as MicroStrategy diversifying their cash reserves into the cryptocurrency.  
Most observers expect a continued rally in 2021. “The longer-term economic impacts of COVID are unknown. However, as we’re still in the midst of major economic disruptions and historical volatility, I believe bitcoin/crypto will continue to rise and be at the pinnacle of positive change,” Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, said in a New Year’s message. 

• Support 1: 27,300
• Support 2: 26,900
• Support 3: 25,300
• Resistance 1: 29,284
• Resistance 2: 30,000
• Resistance 3: 30,491
• Pivot Point: 28,772

From a technical analysis standpoint, $27,300 is key support which, if breached, would open the doors to $25,300.
Bitcoin prices have met resistance at the 227.2% Fibonacci extension level at 29,284. A break of this area puts the $30,000 psychological price level at risk, targeting 30,491(241.4% Fibonacci extension).

XAUUSD

Gold has ended the year with a bullish bias, testing the $1900 barrier, supported by a US dollar decline. It gained 22% over the year and hit a record high at $2075 back in August. It then pulled back, hitting levels under $1800.
The rally of XAUUSD from the November low near $1760 faces a strong resistance at $1900. A break above could open the doors to more gain. The monthly chart points to the upside in gold, but while below $1900, gains are seen as limited. A slide under $1875 would weaken the outlook.
In December, the metal rose more than 6% after falling during the previous four months on a correction from record-high levels. It resumed the upside and consolidated 2020 gains. It is the best year for gold since 2010.

• Support 1: 1,875
• Support 2: 1,864
• Support 3: 1,816
• Resistance 1: 1,900
• Resistance 2: 1,933
• Resistance 3: 1,965
• Pivot Point: 1,900

NASDAQ

The NASDAQ 100 shot higher during the trading session on Thursday as we continue to see buying pressure in general. With the stimulus bill signed last week, it suggests that the cheap money should continue to flow into the market, as the biggest beneficiary will be that the unemployment benefits will extend, meaning that American consumers can continue to buy things. That is 70% of the economy, and therefore stocks will rise. The “stay-at-home” trade is probably going to continue to show signs of life again, meaning that the coronavirus continues to throw money at a handful of companies such as Amazon, Microsoft, and others that allow for productivity from home. The index has soared 45% in 2020, and the one thing that is obvious is that this market will not fall for any significant amount of time.

• Support 1: 12,630
• Support 2: 12,465
• Support 3: 12,175
• Resistance 1: 12,922
• Resistance 2: 12,958
• Resistance 3: 13,000
• Pivot Point: 12,859

The 13,000 level above should be a significant resistance barrier based upon psychology more than anything else. The 50-day EMA at the 12,175 level is also an area that many people will watch. Longer term, it is possible NASDAQ 100 will go looking towards the 14,000 level

CRUDE OIL

The new COVID-19 strain—first identified in the UK—and the soaring cases across the UK, other parts of Europe, and the United States are likely to cap oil price gains in the early months of 2021, while positive news on the vaccine front is set to put upward pressure on prices. Until critical masses of economically active people get vaccinated, oil prices are likely to remain under pressure.  
Another factor to watch in 2021 will be the OPEC+ oil production policy and whether the cartel and its Russia-led allies will ease the cuts before demand can absorb the additional supply.
The market will get the first glimpse into the OPEC+ thinking as early as on the first trading day of 2021. The ministers of the group are meeting on January 4 to discuss production from February.
Despite renewed fears about oil demand due to the new coronavirus strain, Russia is reportedly still in favor of another 500,000 bpd increase in the alliance’s oil production from February.

• Support 1: 48.00
• Support 2: 47.48
• Support 3: 44.00
• Resistance 1: 48.81
• Resistance 2: 49.10
• Resistance 3: 50.00
• Pivot Point: 48.29

The WTI has gone back and forth during the previous week, as we continue to see the $50 level above offers significant resistance. All things being equal, this is a market that continues to see a lot of inflows, but there is a significant amount of resistance from early this year when we broke down from the Covid buyers. The $44 level underneath is support, as is the 50-day EMA which is just above there. Any move towards that area should be a buying opportunity.

Sources

• CoinDesk.com
• InvestingCube.com
• FXstreet.com
• DailyForex.com
• OilPrice.com
• Capitalix Market Research