In January, many cryptocurrencies won back the losses of the previous two months. However, the rise in prices became less pronounced, and in some places even changed to a fall. What are the reasons for this turn of events?
bitcoin
Last Friday, January 20th, BTC was able to fully recoup the losses incurred after the collapse of FTX. The first cryptocurrency broke the $21,473 mark to close at $22,678. On that day, bitcoin rose by more than 7.5%, with the bulk of the growth occurring at a time when it was night in Russia. However, the successes of that day could not be developed in a week. The most that BTC has been able to show over the past seven days is a growth rate of 1.84% on January 25th. In general, the dynamics for such a volatile asset turned out to be extremely modest: only 1.5%.
A source: tradingview.com
Last week we wrote about the slowdown in growth. True, then (already after writing the material) BTC soared for a short time by more than seven percent already mentioned. But this week, traffic has slowed down quite a bit.
There were no revolutionary news events around the historically first cryptocurrency in a week. However, several interesting ideas and proposals were made.
Samson Mow, Former Head of Security at Bitcoin and Blockchain Technology Development Company Blockstream and current Pixelmatic Founder and CEO
expressed confidencewhich is extremely important to evaluate the behavior of the price of bitcoin relative to the two-hundred-day weighted moving average:
“The 200-day weighted moving average is something of a magnet. When the price is below it, there is a positive force driving the price up. When we crossed it, the polarity changes: the price seems to push off and rush upwards.
In general, there is a grain of truth in Mou’s words. Now, on the evening of January 27, the price of BTC is above the 200-day weighted moving average, which is positive for the bulls.
A source: tradingview.com
But in the state of Arizona, activists are trying to push through a bill that would give bitcoin the status of a legal tender. This is not about the entire territory of the United States, but only specifically about Arizona. With the initiative
spoke Senator Wendy Rogers. This is not the first attempt to “legitimize BTC without restrictions.” True, so far all the previous ones have been rejected. However, one cannot fail to note the positive attitude of the politicians of a particular state towards cryptocurrencies, which has become a positive moment for crypto enthusiasts.
In terms of technical analysis, Bitcoin is in the September 2022 highs. Since the price has been above $22,781 for several days, it can be considered a support level. Immediate resistance is the August high of $25,212.
A source: tradingview.com
The fear and greed index entered the “greed phase” for the first time in a long time. Its value is 55, which is an alarming signal for the bulls.
Ethereum
If bitcoin showed, though not big, but growth, then ethereum turned out to be in the red this week. On January 20, Vitalik Buterin’s brainchild token also grew by almost 7%. However, quotes did not rush into the stratosphere. For the week from January 20 to January 27, the ether was not in the red for only two days, while in one of them it grew by a purely conditional 0.1%. Not surprisingly, the overall result of the week was a drop of more than 4.5%.
A source: tradingview.com
A slight consolidation is explained by the fact that, firstly, the cryptocurrency has approached a strong resistance level, and secondly, by the fact that since the beginning of the year it has gained 40% in value. Not surprisingly, individual investors decided to take profits.
And so the platform is all regular. The Ethereum team continues to prepare for the Shanghai fork, tentatively scheduled for March. On January 23, a shadow fork of Shanghai was implemented to test how the planned changes would affect the network. About this in
his Twitter programmer Marius Van Der Wijden said.
From the standpoint of technical analysis, the week did not bring anything new. The nearest support and resistance levels remained the same: $1,501.4 and $1,676.8 respectively.
A source: https://ru.tradingview.com
Cardano
Since the beginning of the year, the Cardano cryptocurrency has grown by more than 57%. During the week from January 20 to 27, the ADA platform token increased in price by 3.23%. On the evening of January 27, its value is $0.3766, while back in December the token was worth $0.246.
A source: tradingview.com
The decline in Cardano’s growth rate, like all other cryptocurrencies, can be explained by the fact that the previous growth was very impressive. In addition, the platform crashed last week. The problems were quickly resolved. Nevertheless, the work of some nodes was temporarily difficult.
In addition, on the 20th, a significant event for Cardano took place – there was
launched decentralized exchange SundaeSwap. True, there were some excesses: some users complained that transactions did not go through.
In early February, the Cardano platform should have
launched Djed stablecoin. The event is significant, but you should not expect it to catapult ADA to the $1 area immediately. In September, the growth of cryptocurrency was expected after the launch of the Vasil hard fork. As a result, we waited – ADA fell in price and has not yet returned to those levels (about $0.48).
Based on technical analysis, we can say that it will be important for Cardano to break the $0.385-0.386 mark. If we manage to close above this resistance level, we can expect further growth. The nearest support level is $0.347, the low of January 25, when it looked like the bears were taking over. But the price eventually rose by almost 4%.
A source: tradingview.com
Thus, the past week turned out to be multidirectional: BTC and ADA grew up, Ethereum fell. At the same time, events are expected soon for altcoins (the Shanghai fork and the launch of the stablecoin Djed), which can lead to noticeable movements.
This material and the information in it does not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
