The Bitcoin chart shows contention between bulls and bears, which has a slight impact on the upward price action of XRP and other altcoins.
Strong start to the new year
Risky assets got off to a strong start to the new year. The S&P 500 (SPX) and Nasdaq closed positive for the second week in a row, posting their best weekly performance since November.
Bitcoin led the recovery in crypto markets with a sharp 21% rally last week. This sent the Bitcoin Fear and Greed Index into the neutral zone of 52 on January 15, its highest level since April 5th. However, the index bounced back its gains and returned to Fear territory again on January 17.
The strong rally in Bitcoin has split the opinions of analysts. Some expect the rally to be a bull trap, while others believe the up move could be the start of a new bull market. Confirmation of the same will occur at the next bottom. If cryptocurrencies form a higher low followed by a higher high, it will suggest that the downtrend may end.
S&P 500 continued its recovery
The S&P 500 continued its recovery last week and reached the downtrend line. The 20-day exponential moving average (EMA) has started to rise at 3,904 and the relative strength index (RSI) is in the positive territory, pointing to an advantage for buyers.
The bulls will have to push and sustain the price above the downtrend line to signal a potential trend change. The bears might try to stop the upside move in the 4.100 to 4.120 region, but if the bulls break this resistance, the index could rise to 4,200 and then to 4,325.
If the bears want to prevent this trend change, they will have to quickly push the price below the moving averages. If they do, it indicates that higher levels are attracting sellers. The index may slide to 3.764 later.
DXY in a descending and expanding pattern
The US Dollar Index (DXY) is falling inside a descending widening wedge pattern for the past few days. Buyers are trying to protect the support line of the wedge.
The relief rally could reach the 20-day EMA (103), which could act as a strong barrier. If the price turns down from this level, it indicates that the sentiment remains negative and traders are selling on small rallies. The bears will then try to continue the downtrend and drive the price down to the psychological support at 100.
Conversely, if buyers push the price above the 20-day EMA, the index could move towards the wedge’s resistance line. The 50-day simple moving average (SMA) 105 is near the resistance line, so the bears are likely to put up a strong defense at this level.
Trying to extend the recovery in Bitcoin
Buyers are trying to pierce the overhead resistance at $21,480 and extend the recovery in Bitcoin, but the bears are not in the mood to give up. The RSI remains in the overbought zone, indicating a possible consolidation or correction in the near term.
The immediate support on the downside is the $20,000 psychological level followed by the 38.2% Fibonacci retracement level at $19,489. If the price rises from this zone, it will indicate that traders view the dips as a buying opportunity.
Buyers will then make another attempt to push the price above $21,500. If successful, the BTC/USDT pair could initiate the next leg of the upward move. The pair could then rally to $22,800 and then bounce back to $25,211.
Conversely, if the price dips below $19,489, the pair could decline to the $18,388 breakout level. As we stated as Kriptokoin.com, BTC is instantly traded at $ 21,270.
Upward movement will continue in ETH
Ether’s recovery faced strong resistance at $1,600 on Jan. 14, but the bulls are giving up the bears. This indicates that the bulls are waiting for the upward move to continue after a short break.
If the price consolidates in a tight range near $1,600, it will increase the chances of a break above the overhead resistance. The ETH/USDT pair could then climb to $1,700 and later to $1,800.
Alternatively, the pair could witness a profit booking if the price drops and dips below $1,516. The pair could then decline to the 38.2% Fibonacci retracement level to $1,439 and then to the 20-day EMA ($1,362). This zone may attract strong buying from the bulls.
Bears try to hold level on BNB
BNB reached the overhead resistance at $318 on Jan. 14. The long wick on the daily candle indicates that the bears are trying to hold the level.
However, the rising 20-day EMA ($276) and the RSI near the overbought zone suggest that the bulls have the upper hand. If the price rises from the current level or the 20-day EMA, the bulls will struggle to push the BNB/USDT pair to $338. A break above this resistance could mark the start of a new upward move.
On the contrary, if the price drops sharply and dips below the moving averages, this will suggest that the pair could stay in the $220 to $320 range for a few more days.
Bulls fail to initiate upward move for XRP
XRP rallied above the triangle and the moving averages on Jan. However, the bulls failed to initiate a strong upward move. This indicates a lack of demand at higher levels.
The long wick on the Jan. 16 candlestick indicates that the bears are selling near the overhead resistance of $0.42. If the price drops and dips below the moving averages, it will hold the pair between $0.32 and $0.42 for a while.
If the bulls want to keep their chances for XRP alive, they will have to aggressively buy the pullback to the 20-day EMA ($0.36). If the price bounces back from this level, the XRP/USDT pair could retest $0.42. If this level is removed, the pair could rise to $0.51 for XRP.
Bulls failed to tap into Dogecoin power
Dogecoin bounced above the 50-day SMA ($0.08) on Jan. 13, but the bulls failed to tap into that strength. The long wick on the January 14 candlestick indicates that the bears are selling above $0.09.
The bears will try to push the price below the moving averages. If they do, it will signal possible range-bound action in the near term.
On the other hand, if the price rebounds strongly from the moving averages, it will indicate a shift in sentiment from selling on the ups to buying on the downs. The bulls will then try to push the price back above $0.09 and launch the DOGE/USDT pair to $0.11. This level can again act as a strong barrier.
ADA faces profit reservation
Strong relief rally on Cardano faces profit booking near $0.37. Overbought levels on the RSI indicate a minor correction or consolidation in the short term.
The ADA/USDT pair could decline and fall to the 20-day EMA ($0.30). If buyers want to continue the recovery, they will have to defend this level aggressively. If the price breaks out strongly from the 20-day EMA, it will increase the probability of a break above $0.37. The pair could then continue its northward march towards $0.44.
This positive view could be invalidated in the near term should the price slide lower and break below the moving averages. Such a move means the bears are back in command.
Polygon touched the general resistance level
Polygon touched the overhead resistance at $1.05 on Jan. 14, but the long wick on the candlestick indicates that short-term traders may have taken a profit.
Buyers tried to break through the hurdle again on January 16, but the bears thwarted their attempts, as seen from the long wick above the candlestick. Sellers will try to pull the price into moving averages, which is an important level to watch out for.
If the price bounces back from the moving averages, it will indicate that lower levels are attracting buyers. The bulls will then try to push the price above $1.05. If they are successful, the MATIC/USDT pair could rise to $1.30.
On the contrary, if the price dips below the moving averages, it would suggest that the pair could stay in the $0.69 to $1.05 range for a while.
Polkadot jumps above downtrend line
Polkadot jumped above the downtrend line on Jan. 14, but higher highs seem to have attracted selling, as seen from the long wick on the day’s candlestick.
The DOT/USDT pair formed an intraday candlestick pattern on January 15, which formed a bearish pattern on January 16. This suggests that failure to continue above the downtrend line may have encouraged short-term traders to record profits.
An initial support on the downside is $5.40 and below it is the 20-day EMA ($5.10). If the price bounces back from this zone, the bulls may try to push the pair back above the downtrend line and sustain it. While the bullish momentum can rally above $6.50, the bears could regain control if the pair sinks below the moving averages.
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