Buyers joined to buy BTC dropped to $39,650, but there are signs that the market-wide correction may not be over yet.
Price Analysis
Bitcoin (BTC) dropped below $40,000 on January 10 for the first time since September 2021. The crypto markets are not alone as the US stock market also saw strong selling. as traders choose to minimize risk and accumulate in 10-year Treasuries the yield rises to 1.8% from 1.51% at the end of 2021.
On January 9, Goldman Sachs chief economist Jan Hatzius said that the US Federal Reserve could raise interest rates by 4 quarters of a percent in 2022.
Analyst Alex Krüeger also warned that crypto markets may not be able to ignore the Fed if it “decides to go all out using a deflationary knife.” He is not alone as former BitMEX CEOs Arthur Hayes and Pentoshi also offer a bearish picture.
Quantum analyst Benjamin Cowen gave some hope to the bulls when he said that “extreme fear” levels on the Crypto Fear & Greed Index have only occurred four times since 2018 and followed by bullish reversals that resulted in strong returns of 17% to 1.585%. in Bitcoins.
Can Bitcoin and major altcoins begin a sustained recovery or will support levels give way? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC / USDT
Bitcoin dropped to $39,650 today as buyers stepped in and bought aggressively as seen from the long tail on the candle bar. If the buyers sustain the recovery, the price might attempt to move towards the 20-day exponential moving average ($45,369).
Both the moving averages are sloping down and the relative strength index (RSI) is in the oversold zone indicating that the bears are in charge. If the price turns down from the 20-day EMA, the BTC/USDT pair can once again drop to the strong support at $39,600 and remain range-bound between the two for a few days.
If the support at $39,600 gives way, selling can increase further and the pair can start to move towards $30,000.
Conversely, if the bulls push the price above the 20-day EMA, the pair can rally to the overhead resistance at $52.088. A break and close above this resistance could signal a possible trend change.
ETH / USDT
The bulls have defended the support line of the descending channel for the past few days but they have not been able to achieve a strong bounce from it. This suggests that demand will dry up at higher levels. Ether (ETH) attempted a recovery on January 9, but it failed to rise above the breakdown at $3,250.
The price has dropped again today and the bears are attempting to drag the ETH/USDT pair below the descending channel. If they manage to do that, selling may increase and the pair can drop to the next strong support at $2,652.
This is an important support for the bulls to defend because if it cracks, the pair can plummet towards the psychological support at $2,000.
Conversely, if the price recovers from the current levels, the bulls will make one more move to clear the overhead barrier at $3,250 and push the pair to the resistance line of the channel.
BNB / USDT
Binance Coin (BNB) slipped below the descending channel support on January 8 but the long tail on the day’s candlestick shows buying at lower levels. The bulls pushed the price back to the channel on January 9 but could not sustain the price above the breakdown of $435.30.
The price has dropped again today and the bears are attempting to sustain the BNB/USDT pair below the channel. If they succeed, the pair can drop to $392.20. This is an important support for the bulls to defend because if it breaks, the next stop can be at $330.
The RSI has fallen into the oversold territory, suggesting that selling may be overdue in the short term. This could lead to a small bounce or limited action over the next few days. A break and close above the 20-day EMA ($492) will be the first sign that the sellers may be losing their grip.
SOL / USDT
Solana (SOL) attempted a recovery on Jan. 8 but the bulls were unable to push the price back above $150. This shows that the bears are selling on relief rallies.
If the bears sustain the price below $133, the SOL/USDT pair can drop to the strong support at $116. Both the moving averages are sloping down and the RSI is close to the oversold zone, showing that the bears are in control.
If the $116 level cracks, the pair can drop to the support line of the channel. If this support also breaks, selling can increase and the pair can plummet to $82. The first sign of strength will be a breakout and close above the 20-day EMA ($162).
ADA / USDT
Cardano (ADA) broke and closed below the $1.18 support on January 9 indicating a continuation of the downtrend. The next support on the downside is the critical level at $1.
The bulls are likely to defend this level aggressively as it has not been broken in the past few months. If the price recovers from the $1 level, the pair can rally to the 50-day SMA ($1.39), where the bears are expected to create stiff resistance.
If the price turns down from the moving averages, the bears will make one more move to drag the ADA/USDT pair below $1. If they succeed, selling could pick up momentum and the pair could drop to the support line of the channel.
XRP/USDT
XRP closed below the $0.75 support on January 8 but rebounded above it on January 9. This shows that the bulls are attempting to trap the aggressive bears, But the recovery effort was short-lived.
The price turned back below $0.75 today, showing that the bears are selling in every minor rally. The sloping moving averages and the RSI near the oversold zone show that the bears are in charge.
If the price sustains below $0.75, the XRP/USDT pair can drop to the December 4 intraday low at $0.60. The bulls will have to push and sustain the price above the 50-day SMA ($0.87) to signal the start of a stronger recovery.
MOON / USDT
Terra’s LUNA token broke below a descending channel pattern on Dec. 8, but the long tail on the day’s candlestick shows buying at lower levels. The bulls pushed the price back to the channel and above the 50-day SMA ($70) on December 9.
The relief rally touched $75.67 and the price dipped below the 50 SMA today. This shows that the bears continue to sell on a bounce. The 20-day EMA ($78) is sloping down and the RSI is near 43, showing that the bears are in control.
If the bears drag the price below $62.46, selling may increase and the LUNA/USDT pair can drop to $51.84. This bearish view will be negated if the price rises from the support line of the channel and breaks above the resistance line.
Related: Billionaire Investor Bill Miller Puts 50% of Net Worth in Bitcoin
DOT / USDT
Polkadot (DOT) attempted to recover from the strong support at $22.66 but the bulls were unable to push the price to the 20-day EMA ($26.95). This suggests that demand will dry up at higher levels.
The falling moving averages and the RSI in the negative zone show that the bears have the upper hand. If the bears turn down and sustain the price below $22.66, the DOT/USDT pair can start its journey down to $16.81.
Alternatively, if the price recovers from the current levels, the bulls will again attempt to push the pair above the 20-day EMA. If they manage to do that, the pair can rally to the 50-day SMA ($29.66) and then to the overhead resistance of $32.78.
AVAX / USDT
Avalanche (AVAX) slipped below the uptrend line of the symmetrical triangle on January 8 but the bears could not build on this advantage. The bulls pushed the price back to the triangle on January 9.
However, the recovery was short-lived as the bears dragged the price back below the triangle. This shows that sentiment remains negative and traders are selling on every minor rally.
There is a strong support at $75.50 but if it collapses, the AVAX/USDT pair can drop to $57.02 and then to $50.
On the other hand, if the price recovers from the current level or the $75.50 support and sustains inside the triangle, it will indicate accumulation on lower levels. After that, the pair can rally to $98, where the bears can create a stiff resistance.
A break and close above the moving averages could open the door for a rally to the downtrend line.
DOGE / USDT
Dogecoin (DOGE) broke below the critical support at $0.15, signaling the start of the next phase of the downtrend.
The downsloping moving averages and the RSI in the oversold territory suggest that the path of least resistance is to the downside. If the bears sustain the price below $0.15, the DOGE/USDT pair can drop to the intraday low on December 4 at $0.13.
Contrary to this assumption, if the price recovers from the current levels, the bulls will attempt to push the pair above the moving averages. If they do, it will yield a range of $0.19 to $0.15 and the pair can rally to $0.19.
The bulls will have to push and sustain the price above this resistance to indicate the start of a new up move.
The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
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