This week turned out to be perhaps the most dramatic for the cryptocurrency market since the beginning of 2022. The flagship crypto tried several times to break through the resistance above $37,500, but this happened only on Wednesday and for a fairly short period. The US Federal Reserve meeting added fuel to the bear fire and once again confirmed that the country's government methods of dealing with the economic consequences of the pandemic will be radical and, most unpleasantly, extremely unprofitable for owners of digital assets. The general political tension ahead of the Beijing Winter Olympics, where the Chinese government plans to roll out a full digital yuan ecosystem, is also contributing to the downtrends of most cryptocurrencies. However, some market analysts see "light at the end of the tunnel" and here's what they have to say about it..
This is the opinion of a group of analysts who have established that the flagship crypto is now at the bottom of a 96-day bull cycle. On Wednesday, it temporarily rose to $38,700, reaching its highest level since January 21, and this partially confirms their method of price forecasting based on time cycles and not on chart patterns. For example, crypto analyst and trader crypto birb claims that Bitcoin has been in the range of $30,000 to $70,000 during 2021. The price of the digital asset has fallen below the 20-week average, so smaller bounces are expected further, and there will be no retesting of the lows.
However, within the framework of a short-term technical analysis of BTC, we can only say with full confidence that the underlying support for the asset is now around the $35,200 level. If the price drop continues long enough, the next major support will be on $35,000 position, having overcome which Bitcoin is likely to return to $34,000 and briefly gain a foothold at this mark. If we talk about resistances, then a fairly large one, located at about $36,200, has already been overcome. But the uptrend is not gaining momentum yet. Perhaps because the bulls are “gathering their forces” to break through the $37,000 level and stay above it for as long as possible. This will provide a credit of loyalty for new traders and help reduce the level of fear in the market, which will help reach the $38,000 mark, which could already start rallies.
With the rise of BTC dominance, the altcoin market had chances for a V-shaped recovery, with Terra (LUNA) being the prime candidate for such a rebound. The coin bounced in parallel with Bitcoin, but then lost a record 33.7% of the value in a week and it’s not yet clear if it will repeat this feat in the near future. It should be taken into account that BTC may face further losses and this will also lead to a drop in the altcoin market.
The chart shows that LUNA tested the long-term demand area at the $54.46 support level, where was active demand in mid-December, which pushed the coin to $103.6. The cryptocurrency is currently trading at $51.81. In the previous test, its price bounced to the level of $69.8, which immediately overcame the resistance level of $68.6. The mark reached in the context of the market structure was a high that needed to be broken and retested in order to change the structure from bullish to bearish. But LUNA couldn't rise above that level. The market structure continues to be bearish. Demand for LUNA is still strong around the $54 level, but if the price falls lower, the next short-term support will be at the $47.6 position. And if it’s achieved, the bulls will almost certainly take the initiative in their own hands.
Crypto silver surged above $2,600 just a few days after skeptics announced a short-term drop below $2,000. However, a general market correction and news from the US saw ETH drop just below $2,400. It looks like the coin has found a compromise and is going to stay in the $2300-$2400 range for some more time.
Market analysts are confident that a fall below $2,000 is not expected, and further prospects for ETH at this stage are highly dependent on the movement of BTC. In fact, the crypto gold bull trend will determine the fate of crypto silver. But even in this scenario, strong volatility cannot be avoided.