Bitcoin and altcoins are in a strong relief rally, but overhead resistance levels and expected comments from the Federal Reserve could impact the recovery.
Bitcoin (BTC) and most major altcoins have bounced off their strong support levels but could the rally sustain to the extent that traders feel confident that a bottom is in place?
Bloomberg Intelligence senior commodity strategist Mike McGlone said that Bitcoin’s price is “about 30% below its 20-week moving average,” roughly at the same position, which had led to bottom formations in March 2020 and July 2021.
Although Bitcoin has corrected sharply in January, the exchanges’ balances dropped from 2.428 million Bitcoin on December 28 to 2.366 million Bitcoin on Jan. 24, according to data from CryptoQuant. This indicates that investors may be stashing away their recent purchases safely.
However, it may not be a V-shaped recovery for Bitcoin as volatility is likely to remain high. Traders will keenly watch the U.S. Federal Reserve’s decision following the conclusion of its two-day policy meeting on Jan. 26.
Could Bitcoin and most major altcoins extend their relief rally? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
The long tail on Bitcoin’s Jan. 24 candlestick shows aggressive buying at lower levels. Sustained buying by the bulls has propelled the price above the immediate resistance at $37,332.70.
The BTC/USDT pair could now reach the 20-day exponential moving average ($40,438), which has been acting as a strong resistance during relief rallies. If the price turns down from this resistance, the bears will try to pull the pair below $32,917.17. If they succeed, the pair could drop to the strong support at $30,000.
Conversely, if the price breaks above the 20-day EMA, the pair could rally to the 50-day simple moving average ($44,935). A break and close above this resistance will be the first sign that the corrective phase could be over. The pair could then challenge the 200-day SMA ($48,750).
ETH/USDT
Ether (ETH) sharply bounced off $2,159 on Jan. 24, as seen from the long tail on the day’s candlestick. This suggests that bulls are aggressively buying at lower levels.
