The U.S. equity market fell sharply Jan. 5 in response to minutes of the Federal Reserve’s December FOMC meeting. These minutes showed that members expected the balance sheet to be reduced once the Fed raises interest rates early 2022.
The shutdown of Kazakhstan’s second largest Bitcoin mining site, causing a negative mood. This was after massive protests from citizens. This led to a drop of 13.4% in overall Bitcoin network hash rate, from 205,000 petahash/second (PH/s), to 177.330 PH/s.
Everyday cryptocurrency market performance. Source: Coin360
Mike Novogratz CEO of Galaxy Digital Holdings believes that the market’s volatility will increase in the coming days. He said that the current drop was due to low volumes. Novogratz believes that there was a lot of institutional demand and Bitcoin will bottom in the $38,000-$40,000 range.
Will Bitcoin and other altcoins face selling? Or will they rebound from strong support levels. Let’s look at the charts for the top 10 cryptocurrency coins to see what happens.
Bitcoin’s range-bound action ended on Jan. 5, when bears pulled the price lower than the strong support of $45,456. This indicates that demand is outstripping supply.
Daily chart of BTC/USDT Source: TradingView
Although there was an attempt to defend the $42,500 support, the price has been selling steadily to close to $39,600. This selloff has negated the positive divergence on the relative strength indicator (RSI).
Bears have control of the market, as evidenced by the RSI close to the oversold area and the downsloping moving Averages. The BTC/USDT pair could plummet to $30,000. If bears continue to sink below $39,600,
Contrarily, if the price rebounded from $39,600 the bulls will attempt to push the pair higher than the 20-day exponentially moving average (EMA), ($46,811). This will be the first sign that the downtrend is over.
Bullish momentum could increase if the SMA (50,610) is broken.
Ether (ETH), which was down from the 20 day EMA ($3,756) Jan. 5, plunged below the intraday low of $3,503.68 on Dec. 4. This indicates that bears are reclaiming their dominance.
Daily chart of ETH/USDT Source: TradingView
Bears are at the top of the heap, as evidenced by the RSI in oversold territory and the moving averages that are downsloping. The channel’s support line could be reached if bears can maintain the price below $3250.
The bulls will try to defend this level and push it to the resistance line. A change in trend will be signaled by a break or close above the channel.
Alternativly, bears could sink the price below this channel and the ETH/USDT pairing could fall to the strong support at 2,652.
Binance Coin (BNB), fell below the psychological support of $500 on Jan. 5. The price has moved to $435.30 after a follow-up sale.
Daily chart BNB/USDT TradingView
The BNB/USDT pair could rise to $500 if the price falls below the current level. Bears will likely mount stiff resistance if the price does not rebound from the current level. The oversold zone RSI and downsloping moving Averages suggest that bears have control.
The pair could fall to $392.20 if the support at $435.30 is broken. Later, it could fall to $320. If the price moves above the channel, this negative view will be dispelled. This could lead to a possible move up to $575.
Solana (SOL), fell below $167.88, and the Dec. 13 intraday high was at $148.04 on January 5. This indicates that bears are reclaiming their dominance.
Daily chart of SOL/USDT Source: TradingView
The selling continues and the bears will try to pull the SOL/USDT pairs to the strong support of $116. This level could attract bullish buying, but relief rallies will likely face selling at the $20-day EMA ($170).
This will signal that traders are buying rallies and the sentiment is still negative. This could increase the chances of a break below $116. The support line may be next.
To signal that the downtrend is over, the buyers will need to push the pair higher than the channel’s resistance line.
Cardano (ADA), which was down from the $20-day EMA ($1.33) Jan. 5, dropped to $1.18 support. The bulls have been able to defend this level, but they have not succeeded in pushing the price higher than the 20-day EMA.
Daily chart ADA/USDT Source: TradingView
The ADA/USDT price could fall to $1.18 if bears pull below that level. This support is important to keep an eye on because if it breaks, selling momentum could pick-up and the pair could slide as low as $0.68.
Contrarily, if bulls push the price higher than the moving averages, then the pair may rise to the resistance line. A break or close above the channel could signal a change in trend. The pair could rally to $1.87.
Although Ripple (XRP), broke below $0.75 support Jan. 5, the candlestick’s long tail suggests that bulls bought this dip. The downside is that buyers have not been in a position to capitalize on the rebound.
Daily chart of XRP/USDT Source: TradingView
On Jan. 8, the XRP/USDT currency pair formed a Doji candlestick structure and bulls are trying to bring the price down below $0.75. The downtrend could resume if that happens and the price may fall to $0.60.
The bears have the upper hand, as evidenced by the RSI in negative territory and the moving averages that are downsloping. Contrary to popular belief, bulls will push the pair higher if the price reboundes from the current level.
They may succeed and signal that there is less selling pressure. This could lead to the pair rising to $1.
Terra’s LUNA token fell below the $20-day EMA ($81), on Jan. 5. This indicates that traders who trade short-term may have made profits after bulls failed at $93.81.
Daily chart of LUNA/USDT Source: TradingView
The bears pulled the price below the 50-day SMA ($69), and this may serve as strong support. The bulls will push the LUNA/USDT price pair towards the downtrend line in the descending channel if the price recovers from the current level.
If the channel closes above the break, it will signal that the correction is over. The bulls will attempt to push the price up to $93.81. A break or close below the 50 day SMA could increase selling, and the pair might drop to $50 psychological support.
Related: Bitcoin and Ether to be $100K and $5K respectively in 2022: Bloomberg Intelligence
Polkadot is in a downtrend and is range bound. For the past few days, the price fluctuated between $22.66 to $32.78.
Daily chart of DOT/USDT Source: TradingView
The 20-day EMA ($28), has begun to fall and the RSI is in the negative territory. This suggests that bears hold the upper hand. The DOT/USDT pair could plummet to $16.81 if sellers fall and the price remains below $22.66.
Contrary to popular belief, the bulls will push the pair towards $32.78 if the price rebounded from $22.66 Breaking and closing above this level could indicate a change in trend. The pair could rise first to $40, and then to $44.
Avalanche (AVAX), broke below the $98 resistance on Jan. 5, and fell to the uptrendline of the symmetrical triangular triangle on Jan. 7. The bulls will defend this level and push price back towards the downtrend.
Daily chart of AVAX/USDT Source: TradingView
The 20-day EMA ($104), has fallen and the RSI is at 38. This indicates that rallies will likely be bought into. The possibility of a breakout below the triangle is increased if the bounce from the current level from $98 or the 20-day EMA turns down.
The AVAX/USDT currency pair could fall to the $75.50 level, where the bulls would attempt to stop the decline. If the price rises and breaks above the triangle, this negative view will be invalidated. This could lead to a rise in the pair to $128.
Dogecoin (DOGE), which fell below $0.15 support Jan. 5, but the long tail of the candlestick indicates that bulls maintained this level. The Doji candlestick pattern was then observed on Jan. 6, which indicated indecision between the bears and bulls.
Daily chart of DOGE/USDT Source: TradingView
On Jan. 7, the bears attempted to end the uncertainty, but the bulls refuse to give up. If buyers don’t push the DOGE/USDT price pair above the $20-day EMA ($0.17) quickly, there is a greater chance of a break or a close below $0.15.
The pair could fall to $0.13, then $0.10. If bulls push the price higher than the 20-day EMA it could indicate that buyers are trying to make a comeback. If bulls overcome this hurdle, the pair could rise to $0.19. The rally could extend to $0.22.
Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
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Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.