Bitcoin roared back into life last week and skyrocketed above $21,000. The sharp 22% rally in Bitcoin improved sentiment and boosted buying in several altcoins. This pushed the total crypto market capitalization above $1 trillion on January 16, according to coinmarketcap data.
The crypto recovery soared last week after the consumer price index (CPI) data showed a 0.1% drop in December, meeting economist expectations. Although the headline CPI at 6.5% from a year ago is much higher than the Federal Reserve’s 2% target, analysts are bullish because inflation is showing signs of cooling off.
We were expecting $18,385 to act as a strong obstacle but Bitcoin blew past this resistance with ease. This shows aggressive buying by the bulls at lower levels. The sharp rally of the past few days has pushed the relative strength index (RSI) into deeply overbought levels. Usually, this leads to a minor correction or consolidation. On the downside, the first support zone is between $20,500 and $20,000.
If Bitcoin stays above this zone, the likelihood of a rally to $22,800 and then to $25,000 increases. A break and close above $21,500 could offer a buying opportunity but it is advisable to keep a tight stop loss because vertical rallies may be followed by sharp pullbacks. If the price turns down and breaks below $20,000, the BTC/USD pair could drop to the 20-day exponential moving average (EMA).
This level is likely to attract strong buying by the bulls. If the price rebounds off the 20-day EMA, the pair could again climb toward $21,500.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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FEATURING IN THIS WEEK’S EDITION
– ReduX Technologies
– A Kid Called Beast