Bitcoin and Ether Market Update January 6, 2022
Total crypto market cap erased $218 billion from its value for the period since Monday and now stands at $2.02 trillion. The top ten coins are all in red for the last 24 hours with Polkadot (DOT) and Solana (SOL) leading the group with 13 and 12.4 percent of losses. At the time of writing bitcoin (BTC) is trading at $42,800. Ether (ETH) is at $3,347.
Bitcoin closed the trading day on Sunday, January 2 at $47,273 after failing to break above the 200-day Simple Moving Average on the daily timeframe for the fifth consecutive day. Not only that but it turned out that the solid green candle from the day before was just a pure New Year celebration-related optimism.
The trading volumes continued to decrease and the Relative Strength Index (RSI) remained in the oversold area.
The biggest cryptocurrency ended the seven-day period with a 7 percent loss.
On Monday, the selloff continued and the BTC/USDT pair fell further down to $46,413, temporarily breaking into the newly established short-term support area between $45,500 and $46,000. However, a general rule in technical analysis is that a support line gets weaker with every re-test. Still, the current price action has some similarities to the September 2020 and the fight for the $10,000 mark.
It was starting to look like the BTC bulls were willing to wait for the outcome of the next Federal Open Market Committee (FOMC) meeting at the end of January before acting.
The Tuesday session was no different and bitcoin dropped to $45,835. It is worth noting that buyers pushed the price up to $47,500 during intraday, but the move was fully retraced in the evening part of the trading.
The third working day of the week came with a flash crash as BTC moved below the mentioned horizontal support and closed the day at $43,500.
As of the time of writing, the coin is trading even lower, at $42,840, still trying to absorb the FED’s FOMC meeting minutes from December where a large number of the participants shared the same view that more interest rate hikes will be required in 2022 to tackle inflation.
The Ethereum Project token ETH registered a 6 percent loss on a weekly basis and ended the trading session on Sunday at $3,828. For the first time since October 2021, the coin is trading below the $3,900 weekly support line. On the other hand, it is still in a bull flag-like pattern formation on the bigger timeframe.
On Monday, January 3, the ether fell down to $3,764 in a full retrace of the move from the previous session.
Then on Tuesday, it first jumped to $3,900 in the morning, then came back down to the zone around $3,700 in the evening after suffering rejection at the 21-day EMA. The trading volumes continued to fall on average and leading altcoin was once again building a bear flag below the already-mentioned former horizontal support. Another drop and re-test of the lower boundary of the downtrend channel might result in breaking it, opening the door for a re-visit of the area below $3,500.
This is precisely what happened during the mid-week session on Wednesday when ETH lost 6.6 percent to reach $3,540, below the downtrend corridor.
The ETH/USDT pair is trading at $3,340 on Thursday morning.