Crypto markets have remained relatively stable as most Asian markets enter the one-week Chinese New Year holiday.
Bitcoin started a fresh decline over the weekend after retesting the $38,500 resistance. Bitcoin, which made the weekly close just above the $38,000 level, is trading at $37,200 as of the time of publication. Ethereum similarly declined slightly after retesting $2,600 and is currently at $2,534 at the time of publication.
Bitcoin’s trading volume on major crypto-asset trading platforms dropped significantly over the weekend compared to last week, according to data compiled by CoinDesk.
Chinese New Year Holiday
Chinese New Year is based on the traditional lunisolar calendar of China and is celebrated by many countries in Asia. Major stock indexes in China, Hong Kong, South Korea and Singapore will be closed due to the usually weeks of celebration. According to analysts, this holiday in Asian markets may cause some decline this week. Support for Bitcoin is near $35,000 and resistance is near $40,000.
What Happens to Bitcoin?
As we have mentioned before, Bitcoin managed to reclaim and hold the support at $ 35,000 after falling to the level of $ 32,900 on January 24. Short-term momentum is improving on intraday charts, which could keep buyers active, according to analysts. On the other hand, long-term indicators continue to point to a neutral/downtrend, which could limit an upside move to the $40,000 to $43,000 resistance zone.
The weekly RSI is approaching the oversold zone, similar to what happened in March 2020 before Bitcoin experienced a massive spike. On the other hand, the monthly chart points to strong selling pressure that could maintain the medium-term downtrend. On the daily chart, however, it has risen from oversold levels since Jan 22, which could attract short-term buyers.
For confirmation, traders can follow the Nasdaq 100 index with support at $14,000 in the short term. As Goldman Sachs pointed out, the correlation between the crypto market and traditional markets is increasing. Therefore, a bounce from the oversold region in traditional markets can have a positive impact on the crypto market as well.
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