Cryptocurrency Market Analysis, January 24th

item image

Arman Shirinyan

Markets are at a pivotal point: We are seeing a long-term reversal or continuation of the downtrend

Markets are still hanging by a fine thread as most assets have faced their local resistance and are not moving forward in recent days which is nothing but healthy consolidation and that could change anytime now .

Important signal of Dogecoin

As mentioned in our previous reviews, Dogecoin was on the verge of receiving a fundamental reversal signal, a cross between the 50-day and 200-day moving averages, also known as a “golden cross.” Usually, this is considered the benchmark for a long-term reversal as it suggests that the medium-term movement of an asset outweighs the long-term movement.

DOGE chart
Source: TradingView

Considering the rise of meme assets in the market, Dogecoin’s suppressed performance has raised some concerns, but at the same time there is no need to worry or bet on the asset’s reversal simply due to lack of momentum.

In the near future, we could see the rally accelerating on the above signal and the overall market recovery.

Ethereum has stalled

After seeing a solid recovery a few days ago, Ethereum faced some problems on its way up as it failed to clear the local resistance level at around $1,610. While it may seem that the 200-day moving average is the barrier that the second largest cryptocurrency in the market could not overcome, this is not necessarily true.

If we take a look at the chart, it becomes clear that the line connecting the local highs during the four month period is the real resistance that Ether has to break. Unfortunately, it doesn’t appear that Ether is breaking it on its own, without the support of the rest of the market.

According to ultrasonic.money, Ethereum issuance has normalized and the cryptocurrency has once again become deflationary. However, constant consumption of ETH is not enough by itself, as it does not directly affect the performance of the second largest cryptocurrency in the market.

However, the recovery of burn operations on Ethereum is the result of increased network activity, which could lead to the improvement of the market performance of Ether, as it usually depends on the revenue of validators, solutions and companies on the network.

Market-level breakout

The short-term bullrun that started recently on the cryptocurrency market would not have been possible without the recovery of traditional markets. The S&P 500 index, which reflects trends in broader markets, has also rallied in recent weeks, but met resistance shortly thereafter.

For now, it has already managed to break the long trendline resistance level and could gain a foothold above it, launching another wave on both the cryptocurrency and traditional markets. However, some experts assume that this is nothing more than a fake bear market and investors should prepare for a reversal and continuation of the trend we have been seeing since late 2021.

Add a Comment

Your email address will not be published. Required fields are marked *