Bitcoin and altcoins started the week in the red, but if this week’s Federal Reserve meeting aligns with general investor expectations, the broader crypto market could soon recover.
Traders tend to lighten positions before important events because they hate uncertainty. The United States Federal Reserve’s next policy decision will be on February 1, when the central bank is expected to raise interest rates by 25 basis points.
Market watchers will be watching anxiously for signs of how high rates could go. This could be a reason to book profits in bitcoins
And select altcoins on January 30th.
According to some on-chain indicators, Bitcoin’s sharp recovery in January may also signal the start of a new bull market. The Profit and Loss Index from the CryptoQuant chain analysis platform issued its first buy signal since 2019.
Blockware Solutions Principal Analyst Joe Burnett believes that Bitcoin will not top $69,000 until the next Bitcoin halving, which is scheduled for March 2024. Burnett predicts that Bitcoin’s next bull market peak will be between $150,000 and $350,000 .This is a huge increase from the current level.
What are the important support levels to watch in bitcoin and altcoins? Let’s study the charts to find out.
After several failed attempts, the S&P 500 closed above the downtrend line on January 26. However, the bears are not willing to surrender without a fight.
Sellers are trying to stop the recovery at 4101, but the upward sloping 20-day exponential moving average (3972) and the Relative Strength Index (RSI) in positive territory indicate that lower resistance is ahead. If buyers add value above 4.101, the index could start its journey towards 4.325.
Alternatively, if the bears break the price below the moving average, the more aggressive bulls could be trapped and the index could then fall to 3.764.
The US Dollar Index (DXY) is falling within a broad descending wedge, but bulls are trying to protect support at 101.29.
A rebound may face a sell at the 20-day EMA (102.63) as the bears defended this level during the downtrend. If the price breaks below the 20-day EMA, the possibility of a break below 101.29 increases. This can raise the index to 100, a psychologically significant level.
Conversely, if the index rises above the 20-day EMA, it suggests strong bullish demand. Then the index can move towards the wedge resistance line. The bulls need to break this barrier to suggest that the short-term downtrend may be over.
Bitcoin climbed above resistance at $23,816 on January 29, but the bulls failed to build momentum on January 30. This may have tempted short-term traders to book profits and the price fell to $22,800.
If the price closes $22,800, it suggests that the bull has turned the level to support. This could increase the chances of a rally to $25,211. Sellers are likely to defend this level with all their might, because if $25,211 is broken, the BTC/USDT pair could rush towards the $30,000 to $32,000 zone.
On the other hand, if the bears pull the price below $22,800, the correction could deepen to the 20-day EMA ($21,716) and then psychological support at $20,000.
It again came close to the overhead resistance at $1,680, but the bulls could not break that barrier. This means that the price is stuck between the 20-day EMA ($1,540) and $1,680.
If the price closes the 20-day EMA, it suggests a strong buy on dips. The bulls will again try to push the price above $1,680. If they succeed, the ETH/USDT pair will move towards $2,000 with a brief stop near $1,800.
Contrary to this assumption, if the price breaks down and breaks below the 20-day EMA, it may attract profit-taking by short-term bulls. The pair could then move lower to the 50-day SMA ($1,365), which could act as a strong support.
Strong resistance was touched at $318 on January 29, but the bulls failed to break that barrier. This shows that the bears are strongly defending the level.
The immediate downside support is the 20-day EMA ($298). Although the bullish 20-day EMA suggests gains for buyers, a negative divergence in the RSI indicates that the positive momentum may be waning. A break below the 20-day EMA could accelerate the sell-off and push the BNB/USDT pair to $280.
Conversely, if the price breaks above the 20-day EMA, the bulls will again try to move the pair above $318. If they manage to do so, the pair could rise to $360.
The price is squeezed between the 20-day EMA ($0.40) and overhead resistance at $0.42.