- Bitcoin (BTC, Tech/Adoption Grade “A-”) is attempting to climb but is facing stiff resistance.
- Ethereum (ETH, Tech/Adoption Grade “A”) has been unable to move ahead of its Bitcoin counterpart in recent weeks.
After weeks and weeks of strong selling pressure, the crypto bears seem to be running out of steam. It is still a little early to make a definitive call, but Jan. 24 appears to have been the local bottom for BTC and the broad crypto market .
Still, Bitcoin is having a tough time continuing its upside move. It’s sitting right at a long-term descending trendline — right around $39,000 — that’s acting as stiff resistance.
BTC will need to break above and stay above $39,000 for a sustained period to invalidate the descending trendline and to kickstart a rally.
Here’s BTC in U.S. dollar terms via Coinbase Global (Nasdaq: COIN):
So, while the bears have let up, we’re still seeing that price action isn’t trending with the fundamentals and adoption curve of Bitcoin.
Just this week, Arizona Sen. Wendy Rogers submitted two pro-Bitcoin bills. The first would allow state agencies to accept crypto as payment for financial obligations, and the second would exempt virtual currencies from tax obligations in Arizona.
And there are growing rumors of another Latin American country following in El Salvador’s steps of crypto adoption as well. Not to mention President Vladimir Putin’s decision to halt Russia’s ban on Bitcoin and explore Russian Bitcoin mining regulation.
Hopefully, these announcements and others in the same vein can help swing things back in favor of the crypto bulls.
Ethereum is still following Bitcoin’s moves and is unable to formulate a rally while Bitcoin continues to show some weakness. It’s currently facing resistance near the $2,800 level, where it made an attempt to break past earlier today before being rejected.
Beyond that, there’s a channel of major resistance between $3,000 and $3,400 that will pose a very tough test for ETH if it begins to rally.
But before either level of resistance can be crossed, BTC will need to start climbing above its resistance.
Here’s ETH in U.S. dollar terms via Coinbase:
Notable News, Notes and Tweets:
- In case you forgot about EIP-1559, ETH is getting burned at a wild rate; $1 billion worth of ETH was burned in just the last 30 days.
- In crypto acquisition news, data firm Dune Analytics just raised a Series B round at a $1 billion valuation.
What’s Next
We have seen the bears slow down over the last week or so as selling pressure has faded away. In the aftermath, BTC appears to have formed a local bottom. However, buyers have not stepped up to the plate yet. Without sufficient demand, prices are unable to move higher.
Perhaps the recent fear, uncertainty and doubt (FUD) surrounding the Federal Reserve’s plans to hike interest rates is still scaring investors away. Or perhaps something else is.
Regardless, without an increase in demand and buyer volume, prices won’t be able to clear resistance levels.
We will be watching all week to see if things change and prices can move, so stay tuned as always.
Best,
Alex
