The Bitcoin (BTC) market price attempts to stabilise following a significant decline, suggesting that the excessiveness may have dissipated from the market.
After years of rejections, the commencement of trading for Bitcoin exchange-traded funds (ETFs) last week did not yield the expected price surge, resulting in total sales of approximately $4.7 billion, as CryptoSlate research and data analyst James Van Straten reported.
The Crypto Fear & Greed Index, previously indicating “extreme greed” with a score of 76, has now shifted to a more neutral level at 52. This transition is viewed positively, indicating a potential reduction in market speculation.
With the “sell the news” event now behind us, traders are likely to shift their attention to macroeconomic data, mainly focusing on the actions of the United States Federal Reserve. The Fed is anticipated to initiate rate cuts as early as March, as CME Group’s FedWatch Tool data suggests. If this occurs, it could bode well for risk-assets.
Is the correction in Bitcoin and other cryptocurrencies complete? Could major digital currencies resume their upward trend in the short term? We will assess the charts to find out.
S&P 500 Index (SPX) Market Analysis
The S&P 500 Index turned up from the 20-day exponential moving average (4,727) on Jan. 8, indicating that the uptrend remains intact and traders view the dips as a buying opportunity.
The upsloping moving averages indicate buyers have the upper hand, but the negative divergence on the relative strength index (RSI) warrants caution. If the value maintains above 4,800, the index will likely ascend to the psychologically important level of 5,000.
On the downside, the 20-day EMA is the first support to watch. If this level allows, it will suggest that the buying pressure is reducing. The index may then fall to the 50-day simple moving average (4,601).
U.S. Dollar Index (DXY) Market Analysis
For several days, the U.S. Dollar Index has been consolidating in a downtrend near the 20-day EMA (102).
The flat 20-day EMA and the RSI near the midpoint do not give a clear advantage either to the bulls or the bears. If the price sustains below the 20-day EMA, the bears will try to pull the index to the critical support at 101.
On the upside, the bulls will likely face selling at the 50-day SMA (103). A break and close above the 50-day SMA will suggest the start of a more robust recovery to 104.50. This level may again witness strong selling by the bears.
Bitcoin (BTC) Market Analysis
The Bitcoin market broke and closed below the support line on Jan. 14, signalling that the bears are trying to make a comeback.
The 20-day EMA ($43,693) has started to turn down, and the RSI is near 46, suggesting that the bears hold a slight edge.
Any recovery attempt is likely to face selling at the 20-day EMA. If the price turns down from the overhead resistance, the sentiment will shift from buying on dips to selling on rallies. The BTC/USDT pair may fall to $40,000 and later to $37,980.
Contrary to this assumption, if buyers overcome the barrier at $44,700, it will suggest that the corrective phase may be over. The pair will then try to reach the psychologically important level of $50,000.
Ether (ETH) price analysis
Ether is correcting in an uptrend, with the bulls trying to keep the price above the immediate support at $2,458.
The upsloping 20-day EMA ($2,398) and the RSI in the positive zone indicate that the bulls are in command. If the price rises from the current level or rebounds off $2,400, it will signal strong buying on dips. The ETH/USDT pair may then rally to $2,717. If this level is scaled, the next stop could be $3,000.
This optimistic view will be negated in the near term if the price continues lower and plunges below $2,400. That could sink the pair to the 50-day SMA ($2,282) and eventually to $2,100.
BNB price analysis
BNB dipped below the 20-day EMA ($301) on Jan. 12, but the bears could not sustain the price below the 61.8% Fibonacci retracement level of $291.
That started a relief rally, which picked up momentum on Jan. 15. If buyers hold the price above $317, the BNB/USDT pair could rise to $338 and then to $350 afterwards. The $350 level will likely attract strong selling by the bears, but if bulls overcome this barrier, the pair may soar to $400.
The critical level to watch on the downside is $291 because a slump below it could tug the price to the neckline.
XRP price analysis
Attempts by the bulls to start a recovery in XRP stalled near the downtrend line on Jan. 11, suggesting that the bears remain in control.
The downsloping 20-day EMA ($0.59) and the RSI below 43 suggest that the path of least resistance is to the downside. The selling could accelerate if the price plummets below the $0.56 support. That will clear the path for a drop to $0.50 and then $0.46.
To prevent the decline, buyers must shove the XRP/USDT pair above the downtrend line. That will invalidate the bearish pattern and start a relief rally to $0.67 and eventually to $0.74.
Solana (SOL) price analysis
Solana returned from the downtrend line on Jan. 14, indicating that the bears vigorously protect the level.
The 20-day EMA ($96) has flattened out, and the RSI is near the midpoint, signalling a balance between supply and demand. If the price skids below the uptrend line, the SOL/USDT pair may tumble to $67.
Alternatively, if the price rises above the downtrend line, it will suggest that the correction may be over. The pair could then travel to $117 and later to $126. Buyers will have to clear this hurdle to signal the resumption of the uptrend.
Cardano (ADA) price analysis
Cardano has been falling inside a descending channel pattern for several days, but a minor positive is that the bulls have maintained the price above the breakout level of $0.46.
If buyers kick the price above the 20-day EMA ($0.55), the ADA/USDT pair could climb to the channel’s downtrend line. A break and close above the channel will indicate that the downtrend could be over. The pair may then surge to the overhead resistance at $0.68.
Contrarily, if the price turns down from the 20-day EMA, it will suggest that the bears continue to sell on rallies. That will increase the likelihood of the pair dropping to the channel’s support line, where the buyers are likely to step in.
Avalanche (AVAX) price analysis
Avalanche has been trading below the breakdown of $38 since Jan. 12, but the bears have failed to sink the price to the strong support at $31.
The 20-day EMA ($37.32) is gradually sloping down, and the RSI is just below the midpoint, indicating a slight advantage to the sellers. If the 50-day SMA ($35.68) support gives way, the AVAX/USDT pair may retest the $31 support. A strong bounce off this level may keep the pair rangebound between $31 and $43.50 for some time.
The next trending move will likely begin after buyers drive the price above $43.50 or bears pull the pair below the crucial support at $31.
Dogecoin (DOGE) price analysis
Dogecoin has been sustaining below the 20-day EMA ($0.08) for the past few days, but the bears have failed to sink the price to $0.07.
The downsloping 20-day EMA and the RSI in the negative territory indicate an advantage to sellers. If the price turns down from the current level or the 20-day EMA, the bears will again try to sink the DOGE/USDT pair to $0.07.
Contrary to this assumption, if the price breaks above the 20-day EMA, it will suggest that the bears are losing their grip. Buyers will then try to propel the pair to the stiff overhead resistance zone between $0.10 and $0.11.
