Bitcoin’s strong rally divided analyst opinions. While some expect the rally to be a trap for the bulls, others believe that the upward move could be the beginning of a new bull market. Confirmation of this will occur during the next drop. If the cryptocurrency forms a higher low followed by a higher high, it will indicate that the downtrend may be over.
Can the S&P 500 Extend Its Rise? What critical levels on Bitcoin and cryptocurrency should I watch out for? Let’s study the graphs to find out.
The S&P 500 continued its recovery last week and reached the downtrend line. The 20-day exponential moving average (EMA) of 3,904 is starting to rise and the relative strength index (RSI) is in positive territory, indicating an advantage for the buyers.
SPX daily chart. Source: TradingView
The bulls will have to push and hold the price above the downtrend line to signal a possible change in trend. The bears may try to stop the upward movement in the 4100 to 4120 area but if the bulls overcome this resistance, the index may rise to 4200 and then 4325.
If the bears want to prevent this trend change, they will have to quickly pull the price below the moving averages. If they do, that would indicate higher levels are attracting sellers. The index could then drop to 3,764.
The US Dollar Index (DXY) has fallen inside a falling falling wedge pattern over the past few days. Buyers are trying to protect the wedge support line.
DXY daily chart. Source: TradingView
The recovery rally could reach the 20-day moving average (103), which could act as a strong barrier. If the price falls below this level, it would indicate that sentiment is still negative and traders are selling on slight rallies. The bears will then try to resume the downtrend and plunge the price into the psychological support level at 100.
Conversely, if buyers push the price above the 20-day moving average, the indicator may head towards the wedge resistance line. The 50-day simple moving average (SMA) is positioned at 105 near the resistance line, so bears are likely to mount a strong defense at this level.
Buyers are trying to break the overhead resistance at $21,480 and extend bitcoin’s recovery but the bears are in no mood to back down. The RSI remains in the deep overbought region, indicating the possibility of a near-term consolidation or correction.
BTC/USDT daily chart. Source: TradingView
The immediate support on the downside is the psychological $20,000 level and then the 38.2% Fibonacci retracement level at $19,489. If the price rises from this area, it will indicate that traders view the dips as a buying opportunity.
Then the buyers will make another attempt to push the price above $21,500. If they succeed, the BTC/USDT pair may start the next phase of the bullish move. The pair could then rise to $22,800 and later rally to $25,211.
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Conversely, if the price drops below $19,489, the pair may drop to the breakout level of $18,388.
The recovery met strong resistance at $1,600 on January 14 but the bulls did not cede ground to the bears. This indicates that the bulls expect the bullish movement to continue after a short pause.
ETH/USDT daily chart. Source: TradingView
If the price consolidates in a narrow range near $1,600, that will boost the odds of a breakout above the general resistance. The ETH/USDT pair could then rise to $1,700 and later to $1,800.
Alternatively, if the price declines and breaks below $1,516, the pair may see profit taking. The pair may then drop to the 38.2% Fibonacci retracement level at $1,439 and thereafter to the 20-day moving average ($1,362). This area could attract strong buying by the bulls.
It reached the overhead resistance at $318 on Jan 14th. The long wick on today’s candlestick shows that the bears are trying to protect the level.
BNB/USDT daily chart. Source: TradingView
However, a bullish 20-day EMA ($276) and an RSI near the overbought area suggest that the bulls have the upper hand. If the price rises from the current level or the 20-day moving average, the bulls will seek to push the BNB/USDT pair to $338. A break above this resistance could signal the start of a new bullish move.
On the contrary, if the price drops sharply and breaks below the moving averages, it will indicate that the pair may stay within the range between $220 and $320 for a few more days.
It rose above the triangle and moving averages on Jan 11 but the bulls failed to start a strong upward move. This indicates a lack of demand at higher levels.
XRP/USDT daily chart. Source: TradingView
The long wick of the January 16th candlestick shows bears selling near the overhead resistance at $0.42. If the price falls and breaks below the moving averages, it will hold the pair