Risk assets have started the new year on a strong note. The S&P 500 (SPX) and the Nasdaq closed in the positive for the second successive week and also notched their best weekly performance since November.
Bitcoin (BTC) led the recovery in the crypto markets with a sharp 21% rally last week. That sent the Bitcoin Fear and Greed Index into the neutral territory of 52 on Jan. 15, its highest since April 5, 2022. However, the index has given back its gains and is again back into the Fear zone on Jan. 17.
Could the S&P 500 extend its rally? What are the critical levels on BTC and the cryptocurrencies to watch out for? Let’s study the charts to find out.
SPX
The S&P 500 continued its recovery last week and has reached the downtrend line. The 20-day exponential moving average (3,904) has started to turn up and the relative strength index (RSI) is in the positive territory, indicating advantage to the buyers.
If bears want to prevent this change in trend, they will have to quickly pull the price below the moving averages. If they do that, it will suggest that higher levels are attracting sellers. The index could then slide to 3,764.
DXY
The U.S. dollar index (DXY) has been falling inside a descending broadening wedge pattern for the past few days. Buyers are trying to protect the support line of the wedge.
Contrarily, if buyers propel the price above the 20-day EMA, the index could march toward the resistance line of the wedge. The 50-day SMA (105) is placed close to the resistance line, hence the bears are likely to mount a strong defense at this level.
BTC/USDT
Buyers are trying to pierce the overhead resistance at $21,480 and extend the recovery in Bitcoin but the bears are in no mood to relent. The RSI remains in deeply overbought territory, indicating a possible consolidation or correction in the near term.
Buyers will then make one more attempt to drive the price above $21,500. If they succeed, the BTC/USDT pair could start the next leg of the up-move. The pair could then rise to $22,800 and later make a dash to $25,211.
Contrarily, if the price breaks below $19,489, the pair could plummet to the breakout level of $18,388.
ETH/USDT
Ether’s (ETH) recovery met with strong resistance at $1,600 on Jan. 14 but the bulls are not ceding ground to the bears. This suggests that the bulls expect the up-move to continue after a brief pause.
Alternatively, if the price turns down and breaks below $1,516, the pair could witness profit booking. The pair could then slump to the 38.2% Fibonacci retracement level of $1,439 and thereafter to the 20-day EMA ($1,362). This zone could attract strong buying by the bulls.
BNB/USDT
BNB (BNB) reached the overhead resistance at $318 on Jan. 14. The long wick on the day’s candlestick shows that the bears are trying to protect the level.
On the contrary, if the price turns down sharply and breaks below the moving averages, it will suggest that the pair may stay inside the range between $220 and $320 for a few more days.
XRP/USDT
XRP (XRP) soared above the triangle and the moving averages on Jan. 11 but the bulls have failed to start a strong up-move. This shows a lack of demand at higher levels.
If bulls want to keep their chances alive, they will have to aggressively buy the pullback to the 20-day EMA ($0.36). If the price rebounds off this level, the XRP/USDT pair could retest $0.42. If this level gets taken out, the pair could soar to $0.51.
DOGE/USDT
Dogecoin (DOGE) jumped above the 50-day SMA ($0.08) on Jan. 13 but the bulls could not capitalize on this strength. The long wick on the Jan. 14 candlestick shows that bears are selling above $0.09.
On the other hand, if the price rebounds off the moving averages with strength, it will indicate a shift in sentiment from selling on rallies to buying on dips. The bulls will then again try to drive the price above $0.09 and catapult the DOGE/USDT pair to $0.11. This level may again act as a strong barrier.
Related: Bitcoin could see $25K by March 2023 as US dollar prints ‘death cross’ — Analysis
ADA/USDT
The strong relief rally in Cardano (ADA) is facing profit-booking near $0.37. The overbought levels on the RSI point to a minor correction or consolidation in the short term.
This positive view could invalidate in the near term if the price turns down and plummets below the moving averages. Such a move will imply that bears are back in command.
MATIC/USDT
Polygon (MATIC) touched the $1.05 overhead resistance level on Jan. 14 but the long wick on the candlestick indicates that the short-term traders may have booked profits.
If the price springs back from the moving averages, it will indicate that lower levels are attracting buyers. The bulls will then try to kick the price above $1.05. If they succeed, the MATIC/USDT pair could surge to $1.30.
On the contrary, if the price collapses below the moving averages, it will suggest that the pair may remain inside the $0.69 to $1.05 range for a while longer.
DOT/USDT
Polkadot (DOT) skyrocketed above the downtrend line on Jan. 14 but higher levels seem to have attracted selling as seen from the long wick on the day’s candlestick.
The first support on the downside is $5.40 and below that is the 20-day EMA ($5.10). If the price rebounds off this zone, the bulls may again try to push and sustain the pair above the downtrend line. The bullish momentum could pick up above $6.50 while the bears may be back in control if the pair dives below the moving averages.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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