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Analysis

Where are crypto markets heading?

cryptos

Over the weekend, some positive news flushed into the crypto markets. The major crypto brokers including FTX, eToro, Crypto.com, and Coinbase, took on debut ads in the commercial break of the Superbowl and an approximate $US8 trillion is being invested into Metaverse by the Chinese tech giants, such as Tencent, Alibaba, and ByteDance, where some of the projects rely on cryptos. Will there be another bullish wave in these digital tokens?

Bitcoin and Ethereum have dropped 5% and 8% respectively from the recent peaks last week. But the leading cryptocurrencies have reversed their downtrends from the 6-month lows since late January. Both Bitcoin and Ethereum rebounded more than 30%, and are trading above $US43,000 and $US3,000 at AET 1:00 am. With stock markets making volatile moves over the geopolitical tension and fear about the speed of US Federal Reserve rate hikes, the cryptocurrencies are relatively calmer in comparison.

What does the Fear & Greed Index tell?

The crypto markets are most likely still on course of the bottom reversal according to the Fear & Greed Index. The index is used to analyze the behavior of investors, the lower number the more fear. When it is at the extreme fear at 0, usually panic selling happens, establishing a buying opportunity, vice versa. It moved from the extreme fear at the lowest at 21 in January to 46, which indicates investors are recovering from the selling mode and stay on the course of rebounding. 

Source: Alternative. me

What do the charts tell?

Both Bitcoin and Ethereum have established a break-out at the downward trendline early in February. The rebound momentum is likely to keep as reflected by Oscillators, MACD, and RSI.

Bitcoin-daily

Bitcoin is likely to form a Head and Shoulder Bottom reversal pattern, with the potential neckline at the recent high at $45,600, which is key near-term resistance, with the imminent support at $42,000 (Fib 23.6%). The medium-term potential long target is at the 100-day moving average at $50,742 (Fib 50.0%).

Intraday, the digital coin needs to close above the 50-day moving average, at above $US43,000 to be able to keep up the momentum.

Ethereum- daily 

Ethereum has established a bottom reversal and broke up at the downward trendline on February 7, it looked for the second wave bottom at the 20-day moving average at $US2,815 (key imminent support), approaching the potential imminent resistance at $US3,238 (Fib 38.20%), with the next long target at $US3,521 (Fib 50.00%). 


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