The stock markets in the United States continued their upward trend last week, despite Federal Reserve Chair Jerome Powell’s announcement that there would not be a rate cut in March. However, Powell did mention that a rate cut is likely to happen sometime this year. He reiterated this stance during his interview on the popular CBS news show 60 Minutes.
The Fed’s comments, along with strong macroeconomic data, have lowered expectations for rate cuts by 120 basis points in 2024, down from 150 basis points at the end of last year. This has caused the U.S. dollar Index (DXY) to reach its highest level in 11 weeks.
Bitcoin (BTC), historically known to move in the opposite direction of the U.S. dollar, may face some challenges in the near future due to the strength of the greenback. However, there is a slight positive for the bulls as there have been significant inflows into BlackRock and Fidelity’s spot Bitcoin exchange-traded funds (ETFs) in January, totaling around $4.8 billion. Continued inflows into these ETFs could potentially limit any potential downside.
Will Bitcoin continue to trade within a range, or can we expect a breakout? How will the altcoins behave in this scenario? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index bounced back from the 20-day exponential moving average (4,850) on February 1st and surged to a new record high on February 2nd.
Both moving averages are trending upwards, indicating the dominance of the bulls. However, the negative divergence on the relative strength index (RSI) should be taken into consideration. The uptrend could face resistance at the psychological level of 5,000, but if buyers push through, the next target could be 5,200.
The crucial support on the downside is the 20-day EMA. A drop below this level will be the first sign of the bulls losing control, potentially leading to a decline towards the 50-day simple moving average (4,734) and then 4,650.
Analysis of the U.S. Dollar Index Price
On February 2nd, the U.S. dollar Index saw a significant rebound from the 50-day SMA (102.84) and successfully broke above the neckline of the inverted head-and-shoulders pattern.
The bullish setup has a pattern target of 107.39, just below the strong resistance at 108. However, the bears are not likely to give up without a fight. They will attempt to halt the upward movement at 104.55 and 106.
If the bears want to regain control, they will need to pull the price below the 50-day SMA. In this case, the index could potentially decline to the crucial support zone between 101 and 99.57. It is expected that the bulls will fiercely defend this zone.
The current state of Bitcoin’s price
The bears have been unsuccessful in pushing Bitcoin below the 20-day EMA ($42,463), despite multiple attempts. This suggests that the bulls are fiercely defending this level.
The buyers are aiming to drive the price to the $44,000 to $44,700 resistance zone, which remains a crucial area for the bears to defend. If they fail to do so, the BTC/USDT pair could potentially surge to the psychological level of $50,000.
However, if the price is rejected at $44,700, the pair may enter a consolidation phase. The bears will gain control if they manage to push the pair below $41,394, potentially leading to a further decline towards $40,000 and eventually $37,980.
Ether price analysis
After trading below the moving averages for multiple days, Ether (ETH) has yet to be pulled down to the strong support level at $2,100 by the bears. This indicates a potential opportunity for buying at lower levels.
The bulls are currently attempting to drive the price above the moving averages. If successful, the ETH/USDT pair could potentially challenge the $2,400 resistance level. A break and close above this level would demonstrate the dominance of the bulls and could lead to a rise towards $2,600 and potentially even the Jan. 12 intraday high of $2,717.
Alternatively, if the price is rejected at the overhead resistance, it would suggest that the bears are active at higher levels. This could keep the pair range-bound between $2,100 and $2,400 for the time being.
BNB price analysis
The BNB (BNB) cryptocurrency rebounded from the 50-day Simple Moving Average (SMA) of $300 on February 4th, but the bulls are facing difficulties in sustaining the momentum.
To invalidate the descending triangle pattern, buyers will need to overcome the resistance at the downtrend line. If they succeed, the BNB/USDT pair could experience a surge towards $320 and potentially reach $338.
On the other hand, if the price turns downwards and breaks below the 50-day SMA, it will signal that the bears are still selling during minor rallies. This could result in a drop to the strong support level at $288. If this support level is breached, it will confirm the bearish setup and potentially trigger a downtrend towards $260.
XRP price analysis
After failing to keep XRP (XRP) below $0.50 on Jan. 31 and Feb. 1, the bears triggered a recovery to the 20-day EMA ($0.53) on Feb. 3.
However, the price was rejected at the 20-day EMA on Feb. 4, indicating bearish sentiment and a tendency for traders to sell during rallies. If the support at $0.50 breaks, the XRP/USDT pair could experience a significant drop to $0.46.
On the other hand, if the price bounces back from its current level and surpasses the 20-day EMA, it would suggest strong support from the bulls at $0.50. The positive divergence on the RSI also indicates a potential recovery in the near future. If buyers manage to push the price above the 20-day EMA, the pair could attempt a rally towards the downtrend line.
Solana price analysis
Solana (SOL) is currently experiencing a fierce battle between the bullish and bearish forces near the moving averages.
The recent price movements have formed an inverse head and shoulders pattern, which will only be confirmed with a break and close above $107. This bullish setup has a target of $125, with a minor resistance at $117 that is likely to be surpassed.
On the other hand, if the price breaks and remains below the moving averages, it will indicate that the bulls have lost control. This could lead to a decline towards $79, a crucial level that the bulls must defend. If this level is breached, the next support lies at $64.
Cardano price analysis
The price of Cardano (ADA) has been fluctuating near the 20-day EMA ($0.50) in recent days, indicating a state of uncertainty between the bullish and bearish forces.
The 20-day EMA has remained stable, while the RSI hovers just below the midpoint, indicating a potential period of consolidation in the near future. If the buyers manage to push the price above the 20-day EMA, the ADA/USDT pair could potentially climb towards the downtrend line. This would signify a potential shift in the trend in the short term.
However, a decline below $0.48 would suggest that the bears are gaining control. In such a scenario, the pair could potentially drop to $0.46 and eventually the support line of the channel.
Avalanche price analysis
The recent price action of Avalanche (AVAX) has shown a reversal from the downtrend line on February 3rd. A positive indication is that the bulls are actively defending the 20-day EMA ($34.55).
If the current level sees a rise in price, it will increase the likelihood of a break above the descending channel. This could potentially lead the AVAX/USDT pair to reach $44 and then aim for a rally towards the significant $50 mark.
Bears, on the other hand, will need to act quickly to prevent this upward movement by pushing the price below the immediate support at $32. If successful, the pair could see a decline towards the support line of the channel, which lies near $24.
Dogecoin price analysis
Despite trading below the 20-day EMA ($0.08), Dogecoin (DOGE) has managed to hold above the uptrend line of the symmetrical triangle pattern, thanks to bullish support.
If the price can break above the 20-day EMA, it will signal a potential continuation of the DOGE/USDT pair’s consolidation within the triangle for the near future. The pair may then aim for a rise towards the downtrend line.
The next significant move is expected to occur upon a breakout from the triangle, whether it be to the upside or downside. A successful surge above the triangle could lead the pair to the resistance zone of $0.10 to $0.11. Conversely, a breakdown below the triangle could result in a drop towards $0.07 and possibly $0.06.
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