The crypto
market has again surpassed $2 trillion, adding almost 2.7% in the last 24
hours. Bitcoin, meanwhile, has not kept pace with the rise in altcoin prices:
BTC strengthened by 1.45% against a 4% rise in ETH, while other leading coins
added between 3% and 7%.
The purchase
of altcoins has intensified after the first cryptocurrency defended the $40K
mark. This was like a sign of faith in the sector’s short-term prospects, which
again allowed enthusiasts to invest in potentially more undervalued coins and
projects.
The crypto
Fear and Greed Index added 1 point to 22 overnight, but we can see that
investors took the recent plunge as a buying opportunity.
On the
chart, bitcoin rebounded from a psychologically important support level for the
second time since September. In addition, the RSI indicator on the daily charts
came out of the oversold area, signalling a pause in the bearish momentum.
However, it
is too early to say that we are seeing the beginning of a new growth wave.
There are several reasons for that.
In this wave
of decline, the RSI indicator reached lower lows than earlier in December and
markedly lower levels in September and July, marking more persistent and
prolonged selling than in previous episodes.
Bitcoin’s
consolidation attempts this week is only a wobble near the bottom. A bullish
reversal will be indicated by solid upward momentum in July or September. The
mini rebound in December was quickly eaten away by the bears.
BTCUSD is
consolidating near the lower boundary of the descending channel. To say that we
see more than just a bounce within this trend is only possible if it grew above
45k – where the previous local lows and the downside resistance line are concentrated.
If bitcoin
fails to develop an uptrend, it will seriously spoil sentiment for
cryptocurrency traders, creating a toxic environment in the sector and putting
selling back on the agenda, despite the prospects of individual projects.
This
article was written by FxPro’s
Senior Market Analyst Alex Kuptsikevich.