Cointree Crypto Market Update - January 20th 2021

Market update for traders

Jump to the beginner's version Bitcoin is moving toward decision time... Welcome to this week’s market update and another week in the extremely eventful cryptocurrency market. We began last week with a showstopping plunge to $39,280 from the previous week’s highs before bulls rallied the cryptocurrency above the psychologically significant $50,000 AUD level. Thanks largely to institutional investors in the US, Bitcoin’s positive move off the lows was over 30%, a total of $12,000. As we have discussed previously, Bitcoin’s volatility can seem like a rollercoaster ride, and it would appear that 10k moves are becoming the norm. While the swift reclamation of $50,000 mid-week may have rekindled thoughts that Bitcoin would continue to another new ATH, it fell just short of the previous high of $54,000, and signaled to bears that price action to the upside was weakening.

Recapping Monday to Sunday last week in detail: after the stunning 27% fall from the previous week’s 50k BTC price, bulls looked to stop the bleeding and found support in the low $40,000’s. The ensuing rally failed to reach $54,000 creating a technical lower high, and since then, the market has declined over 12% toward the 50-day exponential moving average (50EMA), where demand is strong. The horizontal resistance level at $46,000 and the 50EMA is the key battleground for bulls and bears with further consolidation likely in the short term until we see a clear winner. Looking forward, we can see that as the price contracts, a structure is beginning to take shape with Bitcoin forming a symmetrical triangle. While more data is required to validate this pattern, for now, the trend lines are being respected. Expect a breakdown or a breakout at 70% to the apex of the triangle sometime next week. Also, take note of the USD index (DXY) which began to surge. We know that historically Bitcoin has shown increased downside volatility in this environment.\ As Bitcoin finds its sideways rhythm the altcoin market has seen tremendous gains with DeFi cryptos largely leading the pack. For the major altcoins: Ethereum (ETH) is staring at its previous ATH with a weekly gain of 13%. Polkadot (DOT) was the standout performer with a rise of 120% over 7-days and Chainlink (LINK) powered to new highs, now sitting above $30. Cardano (ADA) similarly reached a multi-year high with a 35% gain but was overshadowed by Uniswap (UNI) which is up over 80% at the time of writing.

Read our full market update here.

Market update for beginners

Welcome to this week’s market update and another week in the extremely eventful cryptocurrency market. We began last week with a showstopping plunge to $39,280 from the previous week’s highs before confident buyers brought Bitcoin above the psychologically significant $50,000 AUD level. Thanks largely to institutional investors in the US, Bitcoin’s positive move from its lows was over 30%, a total of $12,000. As we have discussed previously, Bitcoin’s volatility can seem like a rollercoaster ride, and it would appear that 10k moves are becoming the norm. While the swift reclamation of $50,000 mid-week may have rekindled thoughts that Bitcoin would continue to another new ATH, it fell just short of the previous high of $54,000, and signaled to the market that this upward movement was weakening.

Recapping Monday to Sunday last week in detail: after the stunning 27% fall from the previous week’s 50k BTC price, buyers stepped in to prevent BTC’s price from dropping further than the low $40,000’s. The following rally - upward move in price - failed to reach $54,000 creating a technical lower high - a high seen after a low, and since then, the market has declined over 12% toward the 50-day exponential moving average (50EMA), where demand is strong. The horizontal, lower dark-blue, resistance level at $46,000 and the 50EMA is the key battleground for bulls and bears with further consolidation likely in the short term until we see a clear winner. Looking forward, we can see that as the price contracts, a structure is beginning to take shape with Bitcoin forming a symmetrical triangle. While more data is required to validate this pattern, for now, the trend lines are being respected. Expect a breakdown or a breakout at 70% to the tip of the triangle sometime in the next week. Also, take note of the USD index (DXY) which began to surge. We know that historically Bitcoin has shown increased downside volatility in this environment. As Bitcoin finds its sideways rhythm the altcoin market has seen tremendous gains with DeFi cryptos largely leading the pack. For the major altcoins: Ethereum (ETH) is staring at its previous ATH with a weekly gain of 13%. Polkadot (DOT) was the standout performer with a rise of 120% over 7-days and Chainlink (LINK) powered to new highs, now sitting above $30. Cardano (ADA) similarly reached a multi-year high with a 35% gain but was overshadowed by Uniswap (UNI) which is up over 80% at the time of writing.

Read our full market update here.