In this weekend crypto update, like every Sunday, we will analyze the market from different aspects to determine the current trend as well as the key levels to watch while establishing a main direction for the coming weeks. The first thing to remember is that 2023 is starting in the green for cryptocurrencies. However, will this remain so for long? Without further ado, let’s go straight to TradingView.
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Cryptocurrencies will continue to grow?
From a general point of view, we can see the capacity of the market at the moment to maintain above its all-time high of 2017. He created a real support which shouldn’t be broken down unless we want to see a major drop cryptocurrencies in the next few months of 2023.
In the last few days the Total capitalization of cryptocurrencies managed to free himself on the ascent of a technical resistance (red area) to 775/780 billion dollars. Together with the EMA trio, it is a first step in running a trend reversal. From now on, it is important that the price does not re-enter this technical zone to the downside in order not to give in to the sellers in the market.
First, if cryptocurrencies manage to stay above the current zone, we can envisage a capitalization return to $800 billion. It is a technical level that has acted as support and resistance. Second, if this level is also broken to the upside and then held by buyers, it is quite possible that the price will return to the MA100 in the confluence with a technical zone at $845 billion. For now, it is the bullish bias that should be preferred.
Altcoins Still Struggling?
For upper and lower case of altcoins what excludes Bitcoin (BTC) and Ethereum (ETH), we can see that the price situation is less advanced compared to the one just analyzed. In fact, it is still below the resistance that merges with the EMA trio, precisely the EMA32. It is likely that both Ethereum and Bitcoin will need to continue pushing higher if we are to see a break from the current technical levels.
For now, capitalization is bearish, but if the price manages to clear the resistance, it will provide a much more favorable context for many altcoins to rise. Of course, this is on the condition that Bitcoin and Ethereum do not screw up. Assuming the bullish scenario materializes, we can set two bullish targets.
The first is $320 billion. This is a previous daily support that has never been retested as resistance. If the price returns to this level, it could end up discouraging buyers from seeking higher price levels. A recovery from this level will allow the price to fill a gap seeking the MA100, where altcoin capitalization has not returned since November.
Bitcoin dominance is blowing a bit in the last few days
While things were going fairly well in the first half of December, what hurt the rest of the market was the Bitcoin dominance has been on the sidelines since the end of December. Additionally, dominance has trended down since early January, which has allowed Ethereum and some altcoins to surge higher. But will this momentum continue?
Right now, dominance is trading below 41.80%, a former support that is currently acting as resistance. However, if we try to stay above the EMA200 we face a compression configuration that will most likely lead to volatility in the coming days!
The no-loss level for bitcoin dominance is 41.32% as it will mean a shift in capital direction towards Ethereum and some altcoins. In the event that the price falls below it and it doesn’t react to the MA100, the price could fall more. Ideally, for those who choose to invest in Bitcoin and don’t want to reduce its hold on the market, the price should hold above the EMA200 and recover the 41.80%.
Ethereum, the solution to boost other cryptocurrencies?
Regarding Ethereum, things haven’t changed at all as it continues to oscillate up and down within the current range that we identified in the previous crypto points of the weekend. If Ethereum manages to counter Bitcoin by sucking up some of the capital, it will allow altcoins to be in a favorable position. If Ethereum manages to clear the resistance at 0.076 BTC and altcoin capitalization manages to clear its resistance, bullish momentum could see Bitcoin remain on the sidelines.
Although the bias on Ethereum is rather bullish within its range, we are not immune to a loss from the current pivot with the price returning below 0.073 BTC. In this case, it will be important to react quickly and expect a strong recovery of Bitcoin, which will outperform Ethereum. There is nothing further to report on the ETH/BTC pair at the moment.
Can DeFi cryptocurrencies rally?
To end our analysis for this Sunday, we can take a quick look at the case of decentralized fundingcalculated after trading viewto get an idea of how the sector is developing. Since our previous analysis, the downside momentum had extended by a few days, reaching 30 billion before staging a strong recovery and breaking the December highs.
Now the momentum for capitalization is clearly optimistic, showing quite an interesting situation for the sector. In that context, this may be a near-term opportunity to delve into specific decentralized finance altcoins. If current momentum holds, we can envision a return in price on two technical levels. On the one hand the 34.8 billion and on the other hand the 37 billion that will soon merge with the MA100. As long as the 32.1 billion is held, we can keep a bullish bias to capitalize on decentralized finance.
Here we are at the end of this first crypto point of the weekend for 2023. We are seeing a market starting in quite interesting conditions price wise. However, this should not make us forget the uncertain environment for 2023 in terms of inflation and the impact of interest rates on the markets. As Bitcoin dominance begins to wane, Ethereum and altcoins have been able to take advantage of this to post a few percent gains. However, nothing is set for altcoins as a whole as capitalization is still under resistance. We can keep a bullish bias for the next few days, betting on the continuation of the price increase.
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