January 2023, The Distributed, Stanko Illiev and Md Ishtiaque Ahmed
The cryptocurrency market is advancing at the beginning of the 2023 year; Bitcoin (BTC) briefly jumped to $23,330 on January 21, 2023, and touched levels unseen since August 19, 2022. Ethereum (ETH) is also advancing at the start of 2023, and the price of this cryptocurrency has increased more than 35% since the beginning of January 2023.
The explosive rally in the cryptocurrency market is connected with the positive sentiment on the stock markets. The strengthening correlation between crypto prices and stock prices indicates crypto’s maturity.
While sentiment-based indicators show that investors are no longer in panic, a recommendation among experienced investors is to continue to take a defensive investment approach early in 2023 because the global economy faces a recession risk that could dent financial markets again.
The European Central Bank, the Bank of England, and the U.S. Federal Reserve reported at their latest meetings that they have more work to do to bring down inflation. The aggressive monetary policy could be better for riskier assets like stocks and cryptocurrencies. Bridgewater Associates co-chief investment officer Greg Jensen said:
“During periods of high inflation like what the U.S. economy is experiencing today, recessions tend to last longer unless central banks slash interest rates quickly. You haven’t seen the bottom in risky assets, and it’s going to be a couple of years down cycle here.”
Bitcoin Technical Analysis
Key Findings: BTC Technical Analysis
- BTC is under a solid uptrend as the price exceeds the horizontal resistance at $22,500.
- The 8 EMA sharply moves above the 21 EMA, indicating a strong bullish trend.
- The price has the potential to retrace near the crucial support at $20,000 as the RSI reaches above 80 to signal an overbought market.
- We may see Bitcoin hitting the $30,000 mark if the price can break the upcoming resistance at $25,000.
Following a sharp bear market correction, the price of bitcoin has begun to rise. This massive upswing started after the beginning of the new year, 2023. Technically, BTC is showing the potential of returning to $25,000 if it can break a few significant resistances ahead.
Bitcoin exceeded the critical resistance at $22,500 on January 21, 2023, indicating a further bullish move following the current uptrend. The 8 EMA (exponential moving average) is firmly above the 21 EMA, plotting a bullish crossover.
See Related: Has Bitcoin Hit Its Bottom? This Indicator Hints We’re Close
However, the Relative Strength Index (RSI) has already moved above the overbought level (80), suggesting the price may pull back and push for a correction shortly.
In conclusion, if the price of bitcoin is to continue its bull run, it must overcome several obstacles. In particular, up to $25,000. Beyond this obstacle, bulls have room to recover and, with a conservative attitude, try to push to the $30,000 level.
Ethereum Technical Analysis
Key Findings: ETH Technical Analysis
- ETH price has risen over 35% since the beginning of 2023, following the current uptrend.
- The price is holding above the 10 SMA, indicating a further bullish move.
- In case of a counter-trend move, the price may return near the immediate support at $1,500.
- Ethereum must exceed the current resistance at $1,700 to reach the next potential target at $1,800.
Ethereum (ETH) has advanced from $1,195.20 to $1,680,00 since the beginning of January 2023, and the current price stands at $1,625.00. The price stays above the 10-day moving average, indicating that this cryptocurrency could advance even more in the upcoming days.
Ethereum (ETH) was in the red during Saturday’s session, but this decline comes as traders have seemingly moved to secure gains following a recent surge. The first resistance level for Ethereum stands at $1,700.00, and if the price advances above this level, the next target could be $1,800.00.
Traders should also consider that the price of ETH is usually correlated with Bitcoin, and if the price of Bitcoin jumps above $24,000, we would see ETH at a higher price than the current price. The critical support level is $1,500.00, and if the price breaks this level, we could see Ethereum at $1,300.00 or even below.
