Bitcoin price drops as momentum exhaustion takes toll on bulls
Bitcoin had been showing signs of exhaustion for about four days and has finally broken its upward trajectory, coming down from $21,600 to $20,700. There is a possibility of bouncing back before another drop, but chances appear slim.
We expect to see $17,000 very soon and lower prices are possible if the GDP report on Jan. 26 comes out bearish. On top of all this, initial jobless claims released today came in at 190K compared to the forecasted 214K which signals a strong labor market, and as explained before adds to overall inflation.
ETH followed the same direction. Losing $1,600, it tumbled to the local low of $1,511 then bounced back slightly to $1,524. Others in the top 10 were hit as well, with the biggest loser being MATIC.
Meanwhile, the S&P 500 has had a rejection from 4,030 and printed a lower high, the bearish trend is intact and should continue in the coming days bringing more pain to the markets. DXY remains at 102.2 still looking for a strong bounce for this weekly level support.
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Bitcoin Technical Analysis
Bitcoin has topped out at $21,600 and lost the bullish structure, dropping down to $20,800. This breakdown was expected due to dying volume, the liquidity trapped below, as well as high inflation which still surrounds us. Going forward Bitcoin should have its first stop at $17,000 and is unlikely to make a new high above $21,600. We expect to see lower highs and lower lows continuing all the way down to $15,000 or lower.
Ethereum Technical Analysis
Ethereum looks to be in a rough spot right now with low volume and high sell pressure. Currently, it sits on a trendline stretching from all the local tops dating back to 2 months, this is temporary support and Ethereum should go down to lower $1,200s. We might see a retest of $1,580 depending on market sentiment, but for now, it seems to be heavily skewed towards the bullish bias which means our current range is sufficient to gather longs before heading down without a retest.
NFT Market Map
Art Blocks (+9,381.85%) saw outstanding growth among the top 10 thanks to the anticipation of its new drops The Harvest and NimTeens.
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Disclaimer: None of the information here constitutes financial advice and market participants are advised to conduct their own research since cryptocurrencies are speculative assets with considerable risks.