Positive US economic data initially supported the crypto and stock markets, but it appears the bulls lack the prowess to sustain the rally.
The U.S. producer price index fell 0.5% for the month, well above the 0.1% decline projected by economists surveyed by Dow Jones to the biggest monthly decline since April 2020 A sharp drop in energy prices also helped.
Another report showed that retail sales figures fell 1.1% in December, slightly above the estimated 1% decline.
Although both data points show that inflation is cooling, the U.S. stock market has failed to sustain its early gains. Likewise, several cryptocurrencies sold off at their intraday highs, suggesting traders could book gains ahead of the Feb. 1 Federal Reserve meeting
Daily Cryptocurrency Market Performance. Source: Coin360
With a strong crypto recovery over the last few days, traders are moving again. It’s Bitcoin’s
BTC
Ticker below
$22,860
Trading volume jumped 114% in seven days. Strong volume coupled with a sharp rise in price often indicates aggressive bull buying. This raises the possibility that Bitcoin may not breach its November low of $15,476.
How far can bitcoin and altcoins correct and what are the most important support levels to watch for? Let’s study the chart of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin rallied above the upper resistance of $21,480 on Jan. 17 and Jan. 18 but the bulls failed to sustain the higher level, as can be seen from the long wick in the candle. This suggests that the bears are defending all levels.
BTC/USDT Daily Chart. Source: TradingView
Not being above the upper resistance could attract short-term traders profit booking. That could trigger a short-term correction in the BTC/USDT pair. The first strong support is the 38.2% Fibonacci retracement level at $19,489.
If prices rebound from these levels, it would signal that the shallow dip is attracting buyers. Then again, the bulls are trying to keep the price above $21,480. If he is successful, the couple can begin the next step to reaching $25,000.
This bullish outlook could be invalidated if prices continue lower and break below their 20-day exponential moving average (EMA) of $18,865.
ETH/USDT
$1600 level in ether
Eth
Ticker below
$1,633
The Bulls have proven to be a formidable resistance. Although buyers managed to break above this resistance, they could not close above it.
ETH/USDT daily chart. Source: TradingView
The ETH/USDT pair could start a pullback to reach the 38.2% Fibonacci retracement level of $1,439 and then the 20-day EMA ($1,400).
The area could entice shoppers who have missed the bus in the past. That could result in a recheck of the $1,600 resistance. If this level is scaled as a close, the pair could soar to $1,800 and then reach $2,000.
If the bears want to invalidate this positive outlook, they will have to pull the price back below the 20-day EMA.
BNB/USDT
BNB
BNB
Ticker below
$326
It retreated from the upper resistance of $318 on January 14 and reached the 20-day EMA ($280) on January 18. Buyers bought the dip hard, as can be seen from the long tail of the day’s candle
BNB/USDT daily chart. Source: TradingView
Buyers will try to build on this momentum and catapult the price above the upper resistance to $318. If it manages to do so, the BNB/USDT pair could fall back to $338. The Bears can put up a strong defense at this level but if the Bulls clear the hurdle, the pair could skyrocket to $400.
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Contrary to this assumption, if the price were to break below the 20-day EMA, it would indicate that the pair could oscillate within the large $250 to $338 range for some time
XRP/USDT
XRP
XRP
Ticker below
$0.40
Turned lower on January 18 and slipped to the moving average but the long tail on the candle indicates aggressive buying at lower levels.
XRP/USDT daily chart. Source: TradingView
The moving average has completed a bullish crossover and the RSI is in positive territory, indicating that bulls may be strengthening. A pause and close above $0.42 could trigger an up-move that could hit upper resistance at $0.51. This level could attract a sell-off again but if the bulls pierce this resistance, the rally could reach $0.56.
If the bears don’t want the bulls to project prices further, they have to pull back and keep the XRP/USDT pair below the moving average.
ADA/USDT
Cardano
Ada
Ticker it down
