Bitcoin and altcoins started the week in the red, but if this week’s Federal Reserve meeting aligns with investors’ general expectations, the wider crypto market could quickly rebound.
Traders tend to lighten up positions before important events because they hate uncertainty. The United States Federal Reserve’s next policy decision is on Feb. 1, when the central bank is expected to hike rates by 25 basis points.
Market observers will keenly watch for any hints about how high the rates could go. That could be one of the reasons for the profit-booking in Bitcoin and select altcoins on Jan. 30.
Bitcoin’s sharp recovery in January could also be signaling the start of a new bull market, according to certain on-chain metrics. The Profit and Loss Index from on-chain analytics platform CryptoQuant has given its first buy signal since 2019.
Blockware Solutions head analyst Joe Burnett believes that Bitcoin will not break above its all-time high of $69,000 until the next Bitcoin halving, which is scheduled to occur in March 2024. Burnett anticipates Bitcoin’s next bull market top will be between $150,000 to $350,000, which is a massive increase from the current levels.
BTC/USDT
Bitcoin rose above the resistance at $23,816 on Jan. 29 but the bulls could not build upon the momentum on Jan. 30. That may have tempted short-term traders to book profits and the price has dropped down toward $22,800.
If the price rebounds off $22,800, it will suggest that bulls have flipped the level into support. That could increase the likelihood of a rally to $25,211. Sellers are likely to guard this level with all their might because if $25,211 is conquered, the BTC/USDT pair could dash toward the $30,000 to $32,000 zone.
On the other hand, if 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.
ETH/USDT
Ether once again reached near the overhead resistance at $1,680 but the bulls could not overcome this obstacle. That means the price remains stuck between the 20-day EMA ($1,540) and $1,680.
If the price rebounds off the 20-day EMA, it will suggest strong buying on dips. The bulls will then again try to thrust the price above $1,680. If they succeed, the ETH/USDT pair could rally toward $2,000 with a brief stop near $1,800.
Contrary to this assumption, if the price turns down and tumbles below the 20-day EMA, it could attract profit-booking by the short-term bulls. The pair could then decline to the 50-day SMA ($1,365), which may act as a strong support.
BNB/USDT
BNB touched the strong resistance of $318 on Jan. 29 but the bulls could not overcome this barrier. This indicates that bears are fiercely defending the level.
The immediate support on the downside is the 20-day EMA ($298). Although the upsloping 20-day EMA suggests advantage to buyers, the negative divergence on the RSI indicates that the positive momentum could be weakening. The selling could accelerate on a break below the 20-day EMA and the BNB/USDT pair could slide to $280.
Contrarily, if the price turns up from the 20-day EMA, the bulls will again attempt to drive the pair above $318. If they manage to do that, the pair could soar to $360.
ADA/USDT
After trading above the $0.38 resistance for three days, Cardano dropped below the breakout level on Jan. 30. This indicates that bears are active at higher levels.
The rising 20-day EMA ($0.36) indicates advantage to buyers but the negative divergence on the RSI warns that the bulls may be losing their grip. The bears will try to yank the price to the 20-day EMA, which is an important level to keep an eye on in the near term.
If the price plummets below the 20-day EMA, the selling could increase and the ADA/USDT pair may fall to $0.32.
Contrarily, if buyers want to maintain their dominance, they will have to quickly thrust the price above $0.40. The pair could then travel to $0.44.
