The United States stock market is performing well due to strong economic growth and indications of slowing inflation. Last week, the S&P 500 Index rose by 1.06%, inching closer to the significant milestone of 5,000.
Bitcoin also experienced a similar increase, with a 1.08% rise last week. This is impressive considering that Bitcoin had dipped to around $38,500 during the week. The strong recovery demonstrates solid buying activity at lower price levels.
According to data from the FedWatch Tool, the Federal Reserve is expected to keep rates steady in their January 31 meeting, but will begin cutting rates starting from their March meeting. An expansive monetary policy typically benefits risky assets.
The question now is whether Bitcoin will continue its recovery or if higher price levels will attract significant selling pressure from bears. Additionally, how will altcoins behave in this situation? Let’s analyze the charts to find out.
S&P 500 Index:
Last week, the S&P 500 Index continued its upward trend, showing strong demand from buyers at higher levels. While it is facing resistance at 4,900, the fact that the bulls have not given ground to the bears is a positive sign. This suggests that buyers anticipate the uptrend to resume. If the price surpasses 4,907, the index could reach the 5,000 level, where bears may put up a strong defense. On the downside, the critical support to watch is the 20-day exponential moving average at 4,806. A break below this support could pave the way for a deeper correction to the 50-day simple moving average at 4,694.
U.S. Dollar Index:
The U.S. Dollar Index’s recovery is facing resistance at the downtrend line, but the fact that the bulls have kept the price above the moving averages is a positive sign. The rising 20-day EMA and the positive RSI indicate that the path of least resistance is to the upside. If buyers manage to push and maintain the price above the downtrend line, the index may climb to 104.50 and later to 106. Conversely, a downturn from the overhead resistance and a break below the moving averages would signal that bears are strongly defending the downtrend line, potentially leading to a decline to 102.
Bitcoin:
Buyers attempted to drive Bitcoin above the 50-day SMA ($42,795) on January 28 and 29, but were met with resistance from the bears. The flat moving averages and RSI near the midpoint do not provide a clear advantage for either bulls or bears. If the bulls manage to push the price above the 50-day SMA, the BTC/USDT pair could reach $44,700, a level that may attract strong selling pressure from bears. If the price turns down from this level and breaks below the moving averages, it would indicate that the range-bound action may continue for a while. On the other hand, if the price slips and remains below the 20-day EMA, the pair may gradually decline towards $40,000 and then $37,980. The next significant move is likely to occur after the price surpasses $44,700 or falls below $37,980.
Ether:
Ether’s long wick on January 28’s candlestick indicates that bears are selling near the moving averages. The downward turn of the 20-day EMA and the negative RSI suggest that bears have a slight advantage. Sellers will attempt to pull the price to $2,168 and then to the strong support level at $2,100. A strong rebound from this level may keep the ETH/USDT pair range-bound between $2,100 and $2,400 for some time. A break and close above the moving averages would signal strength and could push the pair to $2,400, an important resistance level to watch. If this level is surpassed, the pair may rise to $2,600.
BNB:
BNB has been trading within a descending triangle pattern, indicating that bears are attempting to gain control. However, the bulls successfully defended the $288 support and pushed the price above the 20-day EMA. The BNB/USDT pair may reach the downtrend line, a crucial resistance level. If buyers manage to push the price above the downtrend line, the bearish pattern will be invalidated, and the pair may rally toward $338. Conversely, if bears push the price below the $288 support and complete the descending triangle pattern, sentiment may turn negative, potentially leading to a fall to $260.
XRP:
XRP has been trading within a large range between $0.46 and $0.74 for several months, indicating buying at support and selling near resistance. The downward-sloping moving averages and RSI below 37 suggest that bears hold the advantage. Sellers will attempt to push the price below the psychological support at $0.50 and challenge the crucial level of $0.46. Buyers are expected to vigorously defend the $0.46 support, as a break below it could result in a decline to $0.41. Bulls will need to push and maintain the price above the downtrend line to signal a comeback. If achieved, the XRP/USDT pair may rise to $0.67 and eventually to $0.74.
Solana:
Bulls are trying to sustain Solana above the downtrend line, which is the first sign that the correction may be ending. The flat moving averages and the RSI just above the midpoint indicate a balance between buyers and sellers. A break above $104 could favor the bulls and push the SOL/USDT pair to $117. Conversely, a sharp downturn and a break below the moving averages would indicate bearish activity at higher levels, potentially pulling the pair to $80.
Cardano:
Cardano’s pullback reached the 20-day EMA on January 28, which is acting as a strong resistance level. If the price turns down from the current level, bears may try to pull the ADA/USDT pair to the support line of the channel near $0.42. Bulls will attempt to defend this level, as a failure to do so could lead to a drop to $0.35. On the upside, a break above the 20-day EMA would open the doors for a possible rally to the channel’s downtrend line. Buyers will need to pierce this line to indicate that the correction may be over.
Avalanche:
Avalanche rose above the 20-day EMA on January 28, indicating that bulls are attempting a comeback. However, the long wick on the candlestick suggests that bears may not give up easily. The AVAX/USDT pair may reach the downtrend line, a significant barrier. If the price sharply turns down from the current level or the downtrend line and breaks below the 20-day EMA, the pair may remain within the channel for some time. Buyers will need to drive the price above the channel to indicate a potential trend change in the near term. The pair may then rise to $44 and eventually attempt a rally to $50.
Dogecoin:
On January 29, the bulls managed to push Dogecoin above the 20-day EMA, although they failed to do so on January 28. The downsloping moving averages favor bears, but the RSI near the midpoint suggests a reduction in bearish momentum. If buyers sustain the price above the 20-day EMA, the DOGE/USDT pair could rise to the downtrend line, a level that bears have successfully defended in the past. However, if buyers overcome this obstacle, the pair may rise to the $0.10 to $0.11 resistance zone. On the downside, the important support level is $0.07.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.