Bitcoin and the wider crypto market began to correct after the bullish momentum that drove last week's rally to year-to-date highs started to fizzle out.
Bitcoin (BTC) has been consolidating near $23,000 for the past few days. The next big question troubling investors is whether the rally is over or if Bitcoin resume its recovery.
The strong year-to-date rally in Bitcoin has turned several analysts bullish in the short term. They anticipate Bitcoin to extend its up-move and reach $25,000 and even $30,000.
However, for the slightly longer term, analysts seem to be divided. In comments to Cointelegraph, economist Lyn Alden said Bitcoin could face "considerable danger" in the second half of 2023 as liquidity risks rise.
Daily cryptocurrency market performance. Source: Coin360
On the other hand, ARK Invest CEO and chief investment officer Cathie Wood said in a company video blog on Jan. 23 that crypto assets could witness a huge turnaround in 2023 as the Fed pivots due to falling inflation.
What are the critical support and resistance levels to watch out for? Let's study the charts of the top-10 cryptocurrencies to find out.
Bitcoin has been witnessing a see-saw battle near $22,800. The bears want to stall the up-move at this level but the bulls are not willing to surrender.
The rising 20-day exponential moving average ($20,700) and the relative strength index (RSI) in the overbought zone suggest that bulls have the upper hand. Buyers will have to kick the price above $23,371 to start the next leg of the rally to $25,211.
If the price turns down from the current level and breaks below $22,292, it could trigger the stops of several short-term traders. That could intensify selling and the BTC/USDT pair could dive to $21,480.
If the price rebounds off this level, the bulls will again try to resume the up-move. The short-term trend may turn bearish below $20,400.
After forming Doji candlestick patterns on Jan. 22 and 23, Ether (ETH) turned down sharply on Jan. 24, indicating that the uncertainty resolved in favor of the bears.
The ETH/USDT pair corrected to the 20-day EMA ($1,496) on Jan. 25, which is a crucial support to keep an eye on. If the price bounces off this level, it will suggest that the sentiment remains positive and traders are buying near support.
The pair could then retest the resistance at $1,680. A break above this level could signal the start of the next leg of the up-move. The pair could first rise to $1,800 and thereafter dash toward $2,000.
This bullish view could be negated in the short term if the price plunges below the 20-day EMA. The pair could then fall to $1,352.
BNB/USDT
BNB (BNB) soared above the overhead barrier at $318 on Jan. 24 but the bulls could not maintain the breakout as seen from the long wick on the day's candlestick.
BNB/USDT daily chart. Source: TradingView
The bulls purchased the dip to the 20-day EMA ($290) on Jan. 25 as seen from the long tail on the candlestick. This suggests that the BNB/USDT pair could swing between the 20-day EMA and $318 as the bulls and the bears try to assert their supremacy.
If the price rises above $318, it will indicate that the bulls have overpowered the bears. That could catapult the pair to $360. Conversely, a collapse below the 20-day EMA could tilt the advantage in favor of the bears. The pair could then plunge to the 50-day SMA ($270).
XRP (XRP) broke above the $0.42 overhead resistance on Jan. 23 but that proved to be a bull trap. The bears yanked the price back below the breakout level on Jan. 24.
The critical level to watch on the downside is the 20-day EMA ($0.38). If the price rebounds off this support, it will indicate that lower levels continue to attract buyers. The bulls will then try to drive the price above the $0.42 to $0.44 zone. If they succeed, the XRP/USDT pair could start an up-move to $0.51.
If bears want to strengthen their position, they will have to drag the price below the 20-day EMA. That could tempt short-term traders to book profits and the pair may plummet to the 50-day SMA ($0.37).
ADA/USDT
Cardano's (ADA) rally seems to have hit a wall near $0.38. The bears repeatedly thwarted attempts by the bulls to overcome this barrier between Jan. 22 and Jan. 24.
ADA/USDT daily chart. Source: TradingView
The RSI is showing signs of a negative divergence, signaling that the bullish momentum could be slowing down. Sellers could strengthen their position further if they pull and sustain the price below the 20-day EMA ($0.34). The ADA/USDT pair could first slump to $0.32 and after that to the 50-day SMA ($0.30).
Alternatively, if the price turns up and ascends above $0.38, it will negate the negative divergence. The pair could then travel to $0.44.
Dogecoin (DOGE) has been facing strong resistance at $0.09. The price once again turned down from this level and slipped to the 20-day EMA ($0.08) on Jan. 24.
DOGE/USDT daily chart. Source: TradingView
If the price continues lower and breaks below the moving averages, it will suggest that the bulls may be losing their grip. The DOGE/USDT pair could then extend its stay inside the $0.07 to $0.09 range for a few more days.
On the contrary, if bulls want to retain their edge, they will have to quickly propel and sustain the price above $0.09. That could open the doors for a rally to $0.11, which may again act as a formidable resistance.
MATIC/USDT
The bulls again tried to thrust Polygon (MATIC) above the overhead resistance at $1.05 on Jan. 24 but the bears did not budge. That pulled the price down to the 20-day EMA ($0.93).
MATIC/USDT daily chart. Source: TradingView
If buyers want to keep the upper hand, they will have to protect the 20-day EMA with vigor. The MATIC/USDT pair could then again rise to $1.05. Usually, a tight consolidation near a stiff overhead resistance resolves to the upside. If that were to happen, the pair could ascend to $1.16 and subsequently to $1.30.
Contrary to this assumption, if the price turns down and tumbles below the 20-day EMA, it will suggest that the pair could remain stuck inside the range between $0.69 and $1.05 for a while longer.
Related: Six on-chain metrics suggesting Bitcoin is a 'generational buying opportunity'
LTC/USDT
Litecoin (LTC) remains in a strong uptrend. Buyers pushed the price above $93 on Jan. 23 but the bears sold at higher levels as seen from the long wick on the day's candlestick.
LTC/USDT daily chart. Source: TradingView
The price has pulled back to the 20-day EMA ($84), which is likely to act as a strong support. Buyers will have to push and sustain the price above $92 to signal the resumption of the up-move. The LTC/USDT pair could then jump to $100 and later to $107.
Contrarily, if the price turns down from the current level or the overhead resistance and breaks below the 20-day EMA, it will suggest that traders are booking profits. That could start a correction to the breakout level of $75.
DOT/USDT
Polkadot (DOT) nudged above the resistance line on Jan. 23 and Jan. 24 but the bulls could not sustain the higher levels. This suggests that bears are selling on rallies.
DOT/USDT daily chart. Source: TradingView
While the upsloping 20-day EMA ($5.73) indicates advantage to buyers, the negative divergence on the RSI suggests that the bullish momentum may be weakening.
If the price rebounds off the 20-day EMA with strength, it could increase the possibility of a break above the resistance line. The DOT/USDT pair could then climb to $7.42 and later to $8.05.
The bears will gain the upper hand if they sink the price below the 20-day EMA. That could start a deeper correction to $5.50 and below that to the 50-day SMA ($5.08).
AVAX/USDT
Avalanche (AVAX) turned down from the resistance line on Jan. 24, indicating that bears are defending this level aggressively.
AVAX/USDT daily chart. Source: TradingView
The important support to watch on the downside is the 20-day EMA ($15.79) as the bulls are expected to buy the dips to this level. If the price rebounds off the 20-day EMA, the buyers will again try to clear the overhead hurdle. If they manage to do that, the AVAX/USDT pair could rise to $22 and thereafter to $24.
This positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA. The pair could then decline to the 50-day SMA ($13.48).
Related Topics:ADA), AVAX, BNB, DOGE, DOT, ETH), LTC, Matic, Price analysis 1/25: BTC, XRP
BTC price downside volatility sees $46 million of long Bitcoin positions evaporate in a single day...
BlockFi reportedly wants to get bids in as quickly as possible, to make the most of...
$1.48B in Bitcoin options expire on Friday — Will BTC hold $22K?
Elon Musk's Tesla held onto its Bitcoin in Q4 despite market turbulence