Bitcoin and altcoins started the week in the red, but if this week’s Federal Reserve meeting aligns with general investor expectations, the broader crypto market could recover quickly.
Traders tend to lighten positions before major events because they hate uncertainty. The next policy decision by the US Federal Reserve is on February 1, when the central bank is expected to raise rates by 25 basis points.
Market watchers will be on the lookout for any clues as to how high rates could go. That could be one of the reasons for the booking of gains in Bitcoin (BTC) and select altcoins on January 30.
Bitcoin’s strong rally in January could also be signaling the start of a new bull market, according to certain on-chain metrics. On-chain analysis platform CryptoQuant’s profit and loss index has given its first buy signal since 2019.
Blockware Solutions chief analyst Joe Burnett believes that Bitcoin will not break its all-time high of $69,000 until the next Bitcoin halving, which is scheduled for March 2024. Burnett anticipates that the next Bitcoin bull market top will be between $150 000 and $350,000, which is a massive increase from current levels.
What are the important support levels to watch out for in Bitcoin and altcoins? Let’s study the graphs to find out.
SPX
After several failed attempts, the S&P 500 closed above the downtrend line on January 26. However, the bears are not willing to give up without a fight.
The sellers are trying to stop the rally at 4101, but the up-sloping 20-day EMA (3972) and the RSI in positive territory indicate that the path of least resistance is to the upside. If the buyers push the price above 4101, the index could start its journey towards 4325.
Alternatively, if the bears pull the price below the moving averages, several aggressive bulls may get trapped and the index could drop to 3,764.
DXY
The US Dollar Index (DXY) is falling inside a falling-widening wedge pattern, but the bulls are trying to protect the support at 101.29.
The bounce could face selling at the 20-day EMA (102.63) as the bears defended this level during downtrends. If the price turns down from the 20-day EMA, the probability of a break below 101.29 increases. That could take the index to the psychologically crucial level of 100.
Conversely, if the index breaks above the 20 day EMA, it will suggest strong buying from the bulls. So the index could rally towards the resistance line of the wedge. Bulls will have to clear this hurdle to suggest that the short-term downtrend may be over.
USDT/BTC
Bitcoin broke out of the resistance at $23,816 on Jan. 29, but the bulls were unable to take advantage of the momentum from Jan. 30. That may have tempted short-term traders to book profits and the price has fallen to $22,800.
If the price bounces off $22,800, it will suggest that the bulls have shifted the level to support. That could increase the probability of a rally to $25,211. The sellers are likely to protect this level with all their might because if $25,211 is conquered, the BTC/USDT pair could move towards the $30,000 to $32,000 zone.
On the other hand, if the bears pull the price below $22,800, the correction could deepen to the 20-day EMA ($21,716) and then to the psychological support at $20,000.
EUR/USDT
Ether (ETH) once again reached near the overhead resistance at $1,680 but the bulls were unable to clear this hurdle. That means that the price remains stuck between the 20-day EMA ($1,540) and $1,680.
If the price bounces off the 20 day EMA, it will suggest strong buying on dips. The bulls will again try to push the price above $1,680. If successful, the ETH/USDT pair could rally towards $2,000 with a short stop near $1,800.
Contrary to this assumption, if the price turns down and breaks below the 20 day EMA, it could attract profit booking by short-term bulls. The pair could then drop to the 50-day SMA ($1,365), which may act as strong support.
USD/USDT
BNB (BNB) touched the strong resistance of $318 on Jan 29, but the bulls were unable to overcome this barrier. This indicates that the bears are fiercely defending the level.
Immediate support on the downside is the 20-day EMA ($298). Although the rising 20 day EMA suggests an advantage for the buyers, the negative divergence in the RSI indicates that the positive momentum may be weakening. The selling could accelerate on a break below the 20-day EMA and the BNB/USDT pair could drop to $280.
Conversely, if the price turns up from the 20-day EMA, the bulls will try again to push the pair above $318. If they manage to do that, the pair could skyrocket to $360.
USD/XRP
XRP (XRP) price is compressing between the 20-day EMA ($0.40) and the overhead resistance at $0.42.
Usually, a tight consolidation near overhead resistance gives buyers an advantage, but when bulls fail to break the hurdle, even after repeated attempts, some traders can take profit.
That could initiate a deeper correction, and in this case, a break below the 20-day EMA could open the doors for a drop to the 50-day SMA ($0.37).
If the bulls want to maintain their dominance, they will need to quickly kick the XRP/USDT pair above the $0.42 to $0.44 resistance zone. That could start a rally to $0.51.
DOGO/USDT
The bears are not allowing Dogecoin (DOGE) to stay above $0.09 and the bulls are not allowing it to dip below the 20-day EMA ($0.08).
If the price rises from the current level, the bulls will try again to force the DOGE/USDT pair above $0.09. If they can pull it off, the pair could skyrocket to $0.11 where the bears can mount strong defense again.
Conversely, if the price breaks below the 20-day EMA, the next stop could be the 50-day SMA ($0.08). This level could act as minor support, but if the bears sink the price below it, the pair could collapse to critical support near $0.07.
Related: Bitcoin price pares weekend gains as another CME ‘gap’ lurks below $20K
ADA/USDT
After trading above the $0.38 resistance for three days, Cardano (ADA) fell below the breakout level on Jan. 30. This indicates that the bears are active at higher levels.
The rise to the 20-day EMA ($0.36) indicates an advantage for buyers, but the negative divergence on the RSI warns that the bulls may be losing control. The bears will try to push the price towards the 20 day EMA, which is an important level to watch out for in the short term.
If the price breaks below the 20-day EMA, selling could go higher and the ADA/USDT pair could drop to $0.32.
Conversely, if the buyers want to maintain their dominance, they will need to quickly push the price above $0.40. The pair could then travel to $0.44.
MATIC/USDT
Polygon (MATIC)’s move up was met with a strong sell off near $1.20 on Jan. 29. The price could retest the breakout level of $1.05, which is an important level to watch.
If the price rises from $1.05 again, it will indicate that the bulls have changed the level to support. Then the buyers will try to push the price above $1.20 and challenge the strong resistance near $1.30.
On the other hand, if the price turns below the 20-day EMA ($1.02), it will suggest that the break above $1.05 may have been a bull trap. The MATIC/USDT pair could drop to the 50-day SMA ($0.89).
POINT/USDT
Polkadot (DOT) has been struggling to stay above the resistance line for the past few days, indicating that the bears are fiercely defending this level.
The sellers will try to push the price below the 20-day EMA ($6). If they can do that, it could tip the short-term advantage in favor of the bears. The DOT/USDT pair could then drop to $5.50 and then to the 50-day SMA ($5.20).
Conversely, if the price bounces off the 20-day EMA, the bulls will try to clear the upper zone between the resistance line and $6.84. If that happens, the pair could rally towards $8. There is minor support at $7.42 but it is likely to be crossed.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
