Bitcoin (BTC) dipped below the $40,000 level on Jan. 10 for the first time since September 2021. The crypto markets were not alone as the U.S. equity markets also witnessed strong selling when traders chose to reduce risk and piled into the 10-year Treasury yield which surged to 1.8% from 1.51% at the end of 2021.
On Jan. 9, Goldman Sachs chief economist, Jan Hatzius, said that the U.S. Federal Reserve may increase rates by four quarter-percentage points in 2022.
Analyst Alex Krüeger also warned that crypto markets may not be able to ignore the Fed if it “decides to go all out wielding a deflationary machete.” He was not alone as ex-BitMEX CEO Arthur Hayes and Pentoshi also projected a bearish picture.
Quant analyst Benjamin Cowen gave some hopes to the bulls when he said that levels of “extreme fear” on the Crypto Fear & Greed Index occurred only four times since 2018 and those were followed by bullish reversals resulting in strong returns between 17% to 1,585% in Bitcoin.
Could Bitcoin and major altcoins start a sustained recovery or will the support levels give way? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin plunged to $39,650 today when buyers stepped in and bought aggressively as seen from the long tail on the candlestick. If buyers sustain the rebound, the price could attempt to move toward the 20-day exponential moving average ($45,369).
Both moving averages are sloping down and the relative strength index (RSI) is in the oversold zone suggesting that bears are in command. If the price turns down from the 20-day EMA, the BTC/USDT pair could again drop to the strong support at $39,600 and remain range-bound between these two levels for a few days.
If the support at $39,600 gives way, the
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