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Bitcoin (bitcoin) and U.S. stocks fell sharply on January 5, reacting negatively to the minutes of the Federal Reserve’s December FOMC meeting, which showed Members expect balance sheet reduction It starts after the Fed starts raising interest rates in early 2022.
Adding to the negative sentiment is the closure of the world’s second-largest bitcoin mining center in Kazakhstan, where the internet has been shut down following mass protests by citizens.This resulted in approximately 13.4% of the overall hash rate of the Bitcoin network From 205,000 petahash per second (PH/s) to 177,330 PH/s.
The current drop is small, according to Galaxy Digital Holdings CEO Mike Novogratz, who sees volatility in the market over the next few days. A lot of “institutional demand” is on the sidelines, Novogratz says he expects Bitcoin to Bottoming out in the $38,000-$40,000 area.
Can Bitcoin and major altcoins continue to face the sell-off, or will they bounce off strong support? Let’s study the chart of the top 10 cryptocurrencies to find out.
Bitcoin/USDT
Bitcoin’s range-bound action resolved the downtrend on Jan. 5 when bears pulled the price below strong support at $45,456. This indicates that supply exceeds demand.
There was an attempt to defend the support at $42,500 on Jan. 6, but the continued sell-off brought the price closer to the next support at $39,600. This drop invalidated the positive divergence that formed on the Relative Strength Index (RSI).
The downward sloping moving averages and the RSI near the oversold zone suggest that the bears are in control. If the bears sink and sustain the price below $39,600, the BTC/USDT pair could plummet to $30,000.
Conversely, if the price bounces off $39,600, the bulls will make another attempt to push the pair above the 20-day exponential moving average (EMA) ($46,811). Such a move would be the first sign that the downtrend may be over.
Bullish momentum could pick up on a breakout and close above the 50-day simple moving average (SMA) ($50,610).
ETH/USDT
Ether (Ethereum) fell from its 20-day EMA ($3,756) on Jan. 5 and fell below its Dec. 4 intraday low of $3,503.68. This shows that the bears have reasserted their dominance.
The downward sloping moving averages and the RSI in the oversold zone suggest that bears are in control. If the bears sustain the price below $3,250, the decline could extend to the support line of the channel.
The bulls will try to defend this level and push the price to the resistance line of the channel. A breakout and close above the channel will signal a change in trend.
Alternatively, if the bears sink the price below the channel, the ETH/USDT pair could drop to the strong support at $2,652.
BNB/USDT
Binance Coin (BNB) fell below strong psychological support at $500 on Jan. 5. The subsequent sell-off pulled the price to the next support at $435.30.
If the price rebounds from current levels, the BNB/USDT pair could rally towards $500, where the bears could form strong resistance. The downward sloping moving averages and the RSI in the oversold zone suggest that the bears are in control.
If the $435.30 support gives way, the pair could extend losses to $392.20 and then to $320. This negative view will be negated if the price breaks and sustains above the channel. Such a move could open the door for a possible move to $575.
Sol/USDT
Solana (Sol) fell below $167.88 on Jan. 5 and an intraday low of $148.04 on Dec. 13. This shows that the bears have re-established their dominance.
The sell-off continues and the bears will now try to pull the SOL/USDT pair towards strong support at $116. This level is likely to attract strong buying from the bulls, but a relief rally could face selling near the 20-day EMA ($170).
Such a move would suggest that sentiment remains negative and that traders are selling on rallies. This could increase the odds of a break below $116. The next stop could be the support line of the channel.
Buyers will have to push the pair higher and hold above the channel resistance line to signal that the downtrend may be coming to an end.
ADA/USDT
Cardano (have) retreated from its 20-day EMA ($1.33) on Jan. 5 and fell to strong support at $1.18. The bulls successfully defended this level but failed to push the price above the 20-day EMA.
If the bears sink the price below $1.18, the ADA/USDT pair could drop to the key support level at $1. This is an important support to watch out for, as if it breaks, selling momentum could pick up and the pair could slide to $0.68.
Conversely, if the bulls push the price above the moving averages, the pair could rise to the resistance line of the channel. A breakout and close above the channel would indicate a possible trend change. The pair could then rally to $1.87.
Ripple/USDT
ripple (Ripple) fell below the $0.75 support on Jan. 5, but the long tail on the candlestick suggested that the bulls bought the dip. A small negative, however, was the failure of buyers to build on the rebound.
The XRP/USDT pair formed a doji candlestick pattern on January 8, and the bulls are currently trying to push the price below $0.75. If this happens, the downtrend could resume and the pair could drop to $0.60.
The downward sloping moving averages and the RSI in the negative zone suggest that the bears are in control. Contrary to this assumption, if the price bounces off current levels, the bulls will try to push the pair above the moving averages.
If they are successful, it would suggest that selling pressure may be diminishing. The pair may then rise to $1.
Moon/USDT
Terra’s Luna The coin plummeted below the 20-day EMA ($81) on Jan. 5, suggesting that short-term traders may have taken profits after the bulls failed to break the $93.81 barrier.
The bears have pulled the price to the 50-day SMA ($69), which could act as a strong support. If the price bounces off the current levels, the bulls will try to push the LUNA/USDT pair to the downtrend line of the descending channel.
A breakout and close above the channel will signal that the correction may be over. The bulls will then try to push the price to $93.81. Conversely, a break and close below the 50-day SMA could intensify selling and the pair could drop to psychological support at $50.
related: Bitcoin and Ethereum to reach $100k and $5k in 2022: Bloomberg Intelligence
Points/USDT
polka dot(point) is range-bound in a downtrend. The price has been fluctuating between $22.66 and $32.78 for the past few days.
The 20-day EMA ($28) has started to decline and the RSI has dipped into the negative territory, suggesting that bears have the upper hand. The DOT/USDT pair could plummet to $16.81 if sellers drop and sustain the price below $22.66.
Contrary to this assumption, if the price rebounds from $22.66, the bulls will try to push the pair to $32.78. A breakout and close above this level could signal a possible trend change. The pair may first rise to $40 and then $44.
AVAX / USDT
avalanche(AVAX) fell below the $98 support on Jan. 5 and to the ascending trendline of the symmetrical triangle on Jan. 7. The bulls will try to defend this level and push the price back to the downtrend line.
The 20-day EMA ($104) has turned down and the RSI is below 38, suggesting that the rally could be sold. If a rebound from current levels retraces from $98 or the 20-day EMA, a breakout of the triangle is more likely.
The AVAX/USDT pair is likely to fall to the $75.50 support and the bulls will try to stop the decline. This negative view will be invalidated if the price rises and breaks out of the triangle. The pair could then rise to $128.
Dogecoin/USDT
Dogecoin (Governor) fell below the $0.15 support on Jan. 5, but the long tail on the candlestick suggests that the bulls have defended this level. This was followed by a Doji candlestick pattern on January 6, indicating indecision between the bulls and the bears.
Bears attempted to resolve downside uncertainty on Jan. 7, but bulls were reluctant to let up. However, unless buyers quickly push the DOGE/USDT pair above the 20-day EMA ($0.17), the risk of a breakout and close below $0.15 increases.
If this happens, the pair could fall to $0.13 and then $0.10. Alternatively, if the bulls push the price above the 20-day EMA, it will indicate that buyers are trying to make a comeback. The pair could then rise to $0.19 and if the bulls clear this hurdle, the rally could extend to $0.22.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risk. You should do your own research when making a decision.
Market data provided by bitcoin exchange.
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