Over the last few weeks, a lot has happened in the crypto space and all does not seem to be well anymore for many. Usually, the word 'dip' refers to a slight retracement in price before the continuation of a trend, however, what we've seen so far on several crypto charts suggest otherwise. In this article, we examine the grounds for the resurrection of three of the mainstream cryptocurrencies
Rally Is Not Over For Risk Assets
2022-01-12 • Updated
What is happening?
In December 2021, the main question on global markets was: “When will the FED increase the key rate?” Traders and investors were transferring their capitals into USDs, waiting for the great dump worldwide. Today, many of the “growth stocks” lost more than 50% from their highs. Since November, Bitcoin has plunged by 40%. The US indices are once again trading around the bottom border of the rising global channel.
Will this bearish trend continue, or have we already found the bottom for the next couple of months?
FBS analysts’ opinion
We believe that market members have overestimated tapering risks, and right now is the perfect moment to look for long traders in risk assets.
For example, according to the Fear & Greed index, Bitcoin has already found its global support. If you look at the picture below, you will realize Bitcoin reverses every time the crypto market’s F&G index hits 10.
The Crypto market’s Fear & Greed index
BTC/USD daily chart
The price has reached a powerful range between $39 000 and $41 000. We can notice that the price has always reacted to these levels, so there is no doubt that the pullback will happen this time. The target for this movement is $45 600. Unfortunately, if bears can drag Bitcoin under $39000, the price will head towards $30 000.
US500 daily chart
The US500 bounced off the bottom line of the global ascending channel again. The 100-day moving average is still an insurmountable barrier for sellers. We expect the US500 to renew its all-time high by mid-February. As soon as the price breaks through 4810, it will head towards 4870.
US100 daily chart
The US100 index has also bounced off the global trend line. The triple bottom pattern has appeared on the chart. As soon the price breaks through 16 600, it will reach 17 300.
Bitcoin could be a potential haven for Russian oligarchs seeking to avoid sanctions, as there will be no censorship on the Bitcoin network and cryptocurrency transactions. Russians may have trouble converting their money back to fiat, yet the cryptos could act as a robust store of value for a significant part of holdings that do not need to be liquid.
First, "ETH merge" Google requests are on the rise. At the same time, "buy ETH" requests are at their two-year lows, which is quite a negative factor ahead of the vast update. The community either doesn’t believe in the success, or they are following the "buy the rumors – sell the news" rule and waiting for the massive dump after the merge.
The views here are solely based on Technical Analysis techniques using my personal Smart Money approach. Hence, it is important to understand that the trading of CFDs comes at a risk; if not properly managed, you may lose all of your trading capital. To avoid costly mistakes while you look to trade these opportunities, be sure to do your own due diligence and manage your risk appropriately.
Even though we've only witnessed sluggish movements from the Dollar over the past few weeks, the general idea and bias still seem intact and untampered. The bullish impulse however can be seen as "searching for support".
Suddenly, the US Dollar Index fell 6.70% over the last two weeks, marking the biggest decrease in the currency since 2020.