Bitcoin leaves the weekend behind, where the price of the world’s largest cryptocurrency remained stable, consolidating at around $42,000 – $44,000. Taking into account options market strike prices and technical analysis, Bitcoin is expected to fluctuate in this range for the short term. Blockchain data shows that long-term holders curbed their selling pressure, which favors consolidation for the digital currency queen.
As for trading volume, it has remained light, as investors look for signs that Bitcoin’s downward spiral is coming to an end and that the digital asset is ready to enter a new bull cycle. For the time being, the fact that the online currency has been unable to break above its short-term resistance at $44,500 – $45,000 sends negative signals from a technical analysis standpoint.
In a market short on price catalysts, experts cited by ‘CoinDesk’ warn that the upcoming options expiration on January 28th could serve as a “potential trigger” to send Bitcoin towards $50,000.
“Over the past week, the ‘crypto’ market was mostly oscillating sideways. According to the Fear and Greed Index, market sentiment is in a state of extreme fear and at its lowest point since July 2021,” commented Alejandro Zala, country manager of Bitpanda in Spain.
“A 40% correction is not unusual nor is it the largest we have seen in the last 12 months, so it is too early to call it a bear market yet. Keep in mind that Bitcoin fell more than 50% from April to June last year and fully recovered its losses in October,” he added.
Ether – the Ethereum network unit – and most other ‘altcoins’ languished similarly, replicating Bitcoin’s pattern, while the total market capitalization barely exceeds $2 trillion. The Ethereum (ETH) price chart shows strong buying pressure from this lower support level, setting up for a bullish reversal. The price action shows the formation of a pattern that could initiate a recovery rally. On the upside, immediate resistance is near the $3,380 level, which must be overcome in closing prices to proceed to $3,500.
PROFIT-TAKING ON DOGECOIN
As for the other tokens, the declines in Dogecoin are of note, as it´s down 5%, with investors embarking on a clear profit-taking move after Friday’s rallies courtesy of Elon Musk and the announcement that Tesla will accept the ‘cryptomeme’ as payment on some products.
Over the past year, Elon Musk has been Dogecoins holders’ best friend. The electric vehicle brand’s CEO has hinted at, and directly expressed, his support for the token through messages on Twitter and other channels, and his comments have often driven impressive gains for the cryptocurrency. Even with the recent pullback, Dogecoin is up approximately 19% over the past seven days.
After Musk posted a tweet on January 14th announcing that Dogecoin could be used to purchase Tesla products, the price of the token quickly shot up 25%. While there doesn’t appear to be any specific news behind the cryptocurrency’s pullback on Sunday, it’s not surprising to see it give up some ground after the recent rally.
Dogecoin is currently trading 75% below the all-time high it reached last May. However, even after the recent volatility in the cryptocurrency space in general and substantial drops in the price of its token, it´s still up roughly 1,900% over the past year.