The $40,000 level is proving to be a battleground for Bitcoin (BTC) as bulls and bears fight for dominance. While buyers are optimistic about the future of recently launched Bitcoin exchange-traded funds (ETFs), sellers are concerned about the $3.4 billion in outflows from the Grayscale Bitcoin Trust.
Aside from cryptocurrency-related issues, some analysts are worried about the deteriorating macroeconomic situation. In a recent blog post, former BitMEX CEO Arthur Hayes warned investors that Bitcoin could potentially fall between $35,000 and $30,000. Hayes believes that the United States Federal Reserve may struggle to lower interest rates due to rising shipping costs caused by Houthi attacks on ships in the Red Sea, which could lead to inflation.
Many analysts have turned bearish in the short term, but the strong demand for newly launched Bitcoin ETFs may limit the downside. In just seven days, the nine spot Bitcoin ETFs have accumulated over 100,000 Bitcoin.
What are the key levels that could attract buyers for Bitcoin and other cryptocurrencies? Let’s examine the charts of the top 10 cryptocurrencies to find out.
Bitcoin market analysis
The value of Bitcoin has dropped below the critical $40,000 mark on January 22, suggesting that investors are quickly selling off their holdings. The price has fallen close to the strong support level of $37,980, which is expected to hold for the time being.
Although the price is currently attempting to bounce back from $37,980, it may encounter strong resistance at the 20-day exponential moving average ($42,116). If the price is unable to break through this level, the BTC/USDT pair could potentially drop below $37,980 and reach the next major support at $34,000.
Buyers are anticipated to aggressively defend the price range between $34,000 and $37,980. In order to signal a potential recovery, they will need to push the price above the 20-day EMA. Once the pair surpasses $44,700, bullish momentum may begin to pick up.
Ether’s Price Analysis
Ether (ETH) experienced a weak rebound from the 20-day EMA ($2,395) on January 19, which attracted further selling pressure from the bears. As a result, the price fell below the breakout level of $2,400 on January 22.
The 20-day EMA has now turned downwards and the RSI is hovering around 40, indicating that the bears have a slight advantage. Their goal is to push the price down to the strong support level at $2,100. However, the bulls are expected to fiercely defend this level as a drop below it could trigger a new downtrend towards $1,900.
This bearish outlook will be invalidated if the bulls manage to keep the ETH/USDT pair above the downtrend line. In that case, the pair will attempt to rally towards $2,614 and then $2,717.
BNB price analysis
BNB’s (BNB) recent movement has deviated from the downward trend line on January 22nd and closed below the 20-day EMA ($305), indicating a strong sell-off during rallies.
The price fluctuations over the past few days have formed a descending triangle pattern, which will only be confirmed with a break and close below $288. If this occurs, the bears will likely push the price towards the neckline and potentially to $232.
On the other hand, a resilient bounce off of $288 will suggest that the bulls are fiercely defending this level. The BNB/USDT pair may then see a rise to the 20-day EMA, and a break above this level could open the door for a potential rally towards the downtrend line.
Solana price analysis
The price of Solana (SOL) has been experiencing a downward trend for several days now. The bears have strengthened their grip, causing the price to dip below the 50-day SMA ($91) on January 22nd. This has resulted in a potential bearish crossover of the moving averages and a negative RSI, indicating a likely continuation of the downtrend. The current minor support level is at $77, but if this level is broken, the SOL/USDT pair could potentially retrace 100% and reach a low of $64.
The downtrend line remains a significant obstacle for buyers and if it is surpassed, it could signal the end of the corrective phase. In this case, the pair may see a jump to $107.
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XRP price analysis
XRP (XRP) experienced a decline after being rejected at the 20-day EMA ($0.56) on January 15, and subsequently fell below the immediate support level of $0.54 on January 19.
The 20-day EMA is currently trending downwards and the RSI is approaching oversold territory, suggesting that bears are currently in control of the market. Sellers will likely push the price down to $0.46, where buyers are expected to step in and provide support. However, any potential rebound will likely face resistance at the 20-day EMA. If the price continues to decline and breaks below $0.46, a retest of $0.41 could be imminent.
In order to prevent further downside movement, bulls will need to push the price above the downtrend line and maintain it there. If successful, the pair could potentially rise to $0.67.
Cardano price analysis
Cardano (ADA) has been experiencing a downward trend in a descending channel pattern, indicating a higher level of selling pressure.
The 20-day EMA ($0.52) sloping downwards and the RSI in negative territory suggest that the bears are currently dominating. In an attempt to strengthen their position, sellers may push the price below the channel, potentially causing a sharp decline to $0.35 for the ADA/USDT pair.
However, if the price bounces off the support line of the channel, the bulls may try to break through the resistance at the 20-day EMA. If successful, the pair could potentially rise towards the downtrend line of the channel.
Avalanche price analysis
The value of Avalanche (AVAX) has been under pressure as bears continue to dominate the market, causing the price to drop below the $31 support level on Jan. 22. Despite an attempt at a rebound on Jan. 19, the weak rally was short-lived.
Currently, the bulls are striving to push the price back above the breakdown level of $31, but it is likely to face resistance at the 20-day EMA ($34.32). A reversal from this level could result in a further decline to $24 for the AVAX/USDT pair.
However, if the bulls manage to break above the 20-day EMA, it may indicate a decrease in selling pressure and potentially lead to a climb towards the 50-day SMA ($37.63).
Dogecoin price analysis
On Jan. 20, Dogecoin (DOGE) began a recovery, but the bulls were unable to surpass the 50-day SMA ($0.09). This indicates that bears are still active at higher levels.
The price has reached a strong support level at $0.07, which has held firm on three previous occasions. If the price bounces back strongly from this level, it suggests that the DOGE/USDT pair may trade between $0.07 and $0.09 for a few days.
However, if the price continues to decline and breaks below $0.07, it could potentially drop to $0.06.
The first sign of strength would be a break above the 50-day SMA, which could lead the pair to climb towards the $0.10 to $0.11 resistance zone.
Polkadot price analysis
The recent decline in Polkadot (DOT) has caused it to break below the neckline of the head-and-shoulders pattern on January 22nd, indicating that the market is currently under the control of the bears.
Despite potential attempts by bulls to push the price back above the neckline, they are likely to face strong resistance from the bears. If the price fails to stay above the neckline, it will confirm that the bears have successfully turned this level into a resistance. This could lead to a further decline in price, potentially reaching as low as $4.80.
However, if the bulls are able to successfully bring the price back above the neckline, it will demonstrate significant buying pressure at lower levels. This will also decrease the downside risk for the DOT/USDT pair, especially if it can maintain above the moving averages.
Chainlink price analysis
The Chainlink (LINK) market has been experiencing a period of consolidation, with a trading range of $12.85 to $17.32. This suggests a pattern of buying at lower levels and selling during rallies.
At the moment, the moving averages are relatively flat and the RSI is just below the midpoint, indicating a slight advantage for the bears. If the LINK/USDT pair falls to the support level of $12.85, we can expect to see buying activity. A strong rebound from this level would suggest that the market will continue its range-bound movement for the time being.
If the bears are able to push the price below $12.85 and maintain it at that level, they will gain control and could potentially drive the price down to $12, and possibly even $10.50.
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