First Mover Asia: Bitcoin, Altcoins Rebound Amid Light Trading
By Muyao Shen, Damanick Dantes
Bitcoin topped $42,500 on Sunday after reaching its lowest mark since late September the day before; ether reaches over $3,200.
Market moves: Bitcoin led crypto’s small recovery from last week’s sell-off, but spot volume remained thin over the weekend.
Prices
Bitcoin (BTC): $41,845 +0.1%
Ether (ETH): $3,154 +2.0%
Markets
DJIA: $36,231 -0.01%
Nasdaq: $14.935 -0.9%
Gold: $1,796 +0.2%
Market moves
Bitcoin and most other cryptocurrencies fell last week amid the Federal Reserve’s release of minutes from its December meeting. The Fed signaled that it would tighten monetary policy faster than was once expected.
The leading cryptocurrency fell to as low as $40,505.3 on Coinbase on Saturday, its lowest level since Sept. 21, before it rebounded above $42,000, data from TradingView and Coinbase show.
But as markets in Asia open, it remains uncertain whether the recovery will last since bitcoin’s spot trading volume across major centralized exchanges on Sunday was thin, according to data compiled by CoinDesk. (At the time of publication, bitcoin’s price had sunk below $41,900.)
CoinDesk/CryptoCompare
“The minutes confirmed a strong hawkish bias with markets now pricing in a 90% chance of a Fed [rate] hike in March,” Singapore-based crypto quant trading firm QCP Capital wrote in its Telegram channel on Sunday. “…In the bigger picture, it seems likely that the all-time highs in BTC and ETH will remain capped for most of 2022 as a result of central bank tightening.”
Technician’s take
Bitcoin Oversold Within Downtrend; Resistance at $45K
Bitcoin (BTC) remains in a two-month downtrend, defined by a series of lower price highs.
The cryptocurrency was down about 9% over the past week as upside momentum continued to slow.
There is minor support around $40,000, which could stabilize the current pullback. However, upside appears limited around the $45,000 resistance level. This means buyers could quickly take profits if a price bounce occurs.
The relative strength index (RSI) on the daily chart is the most oversold since Dec.11, albeit within a price downtrend.
Over the long-term, BTC is vulnerable to further selling, especially if buyers fail to hold the $38,000-$40,000 support zone over the weekend. On the weekly chart, the RSI is not yet oversold, which suggests the downtrend remains intact.
BTC is roughly two weeks away from registering a downside exhaustion signal, which typically precedes a countertrend price bounce. Still, similar oversold readings on the daily chart have been delayed as buyers remain on the sidelines.
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