Buyers scrambled to buy Bitcoin’s plunge to $39,650, but there are indications that the market-wide downturn may not be over.
Price Analysis –
On Jan. 10, Bitcoin (BTC) fell below the $40,000 mark for the first time since September 2021. When traders opted to reduce risk and entrench themselves in the 10-year Treasury bond, which jumped to 1.8% from 1.51% at the end of 2021, both crypto and US equity markets showed significant selling pressure.
The Federal Reserve may raise rates by four quarter-percentage points in 2022, according to Goldman Sachs chief economist Jan Hatzius.
Following a brief recovery, bitcoin prices have dropped by more than 30% in the last month, prompting some analysts to declare their bearishness. The Federal Reserve may implement stricter monetary policy and disregard cryptocurrencies if it “decides to go all out wielding a deflationary machete,” according to Alex Krüeger of MKM Partners. Hayes and Pentoshi also saw things going from bad to worse for bitcoin.
Benjamin Cowen, an expert on the crypto market at QuantAnalytix, offered some encouragement to the bulls when he stated that “levels of extreme fear” on the Crypto Fear & Greed Index occurred just four times since 2018 and were followed by strong gains of 17% to 1,585 percent in Bitcoin.
Will the price of Bitcoin and other large altcoins stabilize, or will the support levels break? Let’s have a look at the charts of the top 10 cryptocurrencies to see what happens.
BTC/USDT
On January 10, the price dropped to $39,650 when investors rushed in to acquire as seen on the long tail on the candlestick. If buyers continue to rise, the price may attempt a push toward the 20-day exponential moving average ($45,369).
The bears appear to be in control, with both moving averages sloping downward and the relative strength index (RSI) sitting in the oversold territory, which suggests that they are in charge. If the BTC/USDT pair drops below the 20-day EMA again, it could stay rangebound between $39,600 and $43,000 for a few days before resuming its downward trend.
If the 40,000-dollar support is broken, the selling may intensify and the pair could head toward $30,000. If bulls propel the price above the 20-day EMA, it might rise to strong overhead resistance at $52,088. A break and close above this barrier would indicate a shift in direction.
ETH/USDT
The bulls have been defending the channel’s downward trendline for the past few days, but they haven’t been able to make a significant rebound. This implies that demand fades away at higher prices. Ether (ETH) tried to recover on Jan. 9, but it could not breach the $3,250 breakdown level.
ETH/USDT daily chart. Source: TradingView
On January 10, the price fell further and the bears are attempting to push the ETH/USDT pair below the descending channel. If they succeed, selling might intensify, pushing the pair down to $2,652 as a strong support. This is a crucial barrier for the bulls to protect since if it breaks, the pair may plummet toward $2,000 psychological barrier.
BNB/USDT
On Jan. 8, Binance Coin (BNB) fell below the support line of the descending channel, but the long tail on the day’s candlestick indicated buying at lower levels. The bulls attempted to push the price back into the channel on Jan. 9 but were unable to maintain it above $435.30, the breakdown level.
BNB/USDT daily chart. Source: TradingView
On Jan. 10, the price fell yet again, and the bears are attempting to maintain the BNB/USDT pair below the channel. If they succeed, the pair could fall as low as $392.20 if it breaks below this support. This is a crucial support for the bulls to defend because if it breaks, there’s a possibility that the next stop would be $330.
The RSI has fallen into the oversold range, suggesting that selling in the near term may be excessive. In the following days, a small recovery or a range-bound behavior is possible. The first indication that sellers are weakening their grip will be a break and close above the 20-day EMA ($492).
SOL/USDT
On January 8, Solana (SOL) attempted a recovery, but the bulls were unable to push the price back above $150. This indicates that sellers are selling on relief rallies.
If the price falls below $133, the SOL/USDT pair could fall as low as $116, which is a strong support. The moving averages are sloping downward and the RSI is close to entering the oversold territory, implying that sellers have the upper hand. If this support level cracks, the pair may plunge to $82. A break and close above the 20-day EMA ($162) will be an early indicator of strength (green line).
ADA/USDT
The price of Cardano (ADA) broke and closed below the $1.18 assistance on Jan. 9, signaling the resumption of the downturn. The next defensive line is $1. On the downside, the key level is $1.
The bulls are likely to defend this level aggressively, as it has not been broken for months. If the value rebounds from $1, the pair may rise to the 50-day SMA ($1.39), where the bears will mount a strong resistance. The bears will make one last attempt to push the ADA/USDT pair below $1 if the price reaches above either of the moving averages. The selling might gain momentum and send the pair plummeting down to support line of channel if they succeed in doing so.
XRP/USDT
Ripple (XRP) dropped below $0.75 on Jan. 8, but it rebounded above the level on Jan. 9. This suggests that bulls attempted to trap the voracious bears, however the comeback was unsuccessful.
XRP/USDT daily chart. Source: TradingView
The price fell below $0.75 on Jan. 10, suggesting that bears are selling on every little advance. The downsloping moving averages and the RSI near the oversold zone suggest that sellers are in control. If the price holds under $0.75, the XRP/USDT pair may fall to its Dec. 4 intraday low of $0.60. To signal the start of a more robust recovery, the bulls will have to push and maintain the price above the 50-day SMA ($0) .
LUNA/USDT
On December 8, the Terra’s LUNA token broke below the downward channel pattern, but the long tail on the day’s candle indicates that buying at lower levels is a good idea. The price was pushed back into the channel and above the 50-day SMA ($70) on December 9 by the bulls.
On January 10, the price breached the 50-day SMA and dropped below it. This indicates that sellers are continuing to sell on rallies. The 20-day EMA is sloping down and the RSI is at 43, suggesting that bears have the upper hand. If bears push the value below $62.46, additional selling may ensue, bringing the LUNA/USDT pair back down to $51.84. If the price breaks out of the channel’s support line and surpasses its resistance line, this bearish view will be invalidated.
DOT/USDT
Following a resoundingly successful week, Polkadot’s (DOT) price has struggled to climb back up, with the bulls unable to push it over the 20-day EMA ($26.95). This shows that as you go higher up, demand decreases.
DOT/USDT daily chart. Source: TradingView
The downsloping moving averages and the negative RSI suggest that bears are in the driver’s seat. If bulls sink and maintain the price below $22.66, the DOT/USDT pair may begin its decline to $16.81. Alternatively, if the price rises from its current level, bulls will try to push it even higher. The pair could move up to $29.66 (50-day SMA) before reaching overhead resistance at $32.78 if they succeed in doing so.)
AVAX/USDT
On January 9, the price of Avalanche (AVAX) fell beneath the symmetrical triangle’s uptrend line, but the bears had trouble extending this edge. On January 9, the bulls drove the price back into the triangle.
The bears, however, quickly restored the price below the triangle. This suggests that traders are still bearish and selling on every small rise. There is significant support at $75.50, but if it breaks there is a danger of a large drop.
On the other side, if the price rebounds from its current level or the $75.50 support and holds within the triangle, it suggests accumulation at lower levels. The pair might then climb to $98, where bears may put up a strong resistance.
A break and close above the moving averages might pave the way for a rally to the downtrend line.
DOGE/USDT
Dogecoin (DOGE) has broken below its crucial support of $0.15, signaling the start of the next leg of the decline.
Contrary to popular belief, if the price rises from its current position, the bulls will attempt to push the pair above the moving averages. If they succeed in doing so, the $0.19 to $0.15 range would come into play, and the pair could climb to $0.19.
To signal the start of a new upswing, the bulls will have to push and keep the price above this resistance.
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