Crypto Frontline

BTCUSD (Bitstamp)

The bearish corrective move we were anticipating finally materialized and BTC dropped toward the $21.5k area this week. A short-term bounce can be noticed on the 4h chart, but for now, attention seems to have shifted toward Tuesday’s US inflation readings. That’s the news that could impact asset classes across the board and market participants should remain cautious by then.

With that being the case, we suspect there’s scope for further consolidation until the numbers are out. On the upside, resistance is placed around the 200 SMA and then $22.4k. The price is also treating the 20 EMA as a supply area, so until that changes a resumption of the bullish scenario is on hold.

Further selling could push BTC towards $20.5k and then the psychological $20k level. Although some gains were whipped out, that doesn’t mean a pause in the bullish move. As long as there are no new shocks that need a swift repricing of risk assets, the dip could be regarded by longer-term buyers as an opportunity to further pile onto BTC holdings.

ETHUSD (Kraken)

Last week we’ve mentioned that Ether’s inability to break above the November 2022 high was an initial sign of weakness and eventually the price did sell off. We can see on the chart how sellers drove the market lower, from $1,700 to $1,500 before a short-term bounce started to unfold.

Broadly speaking, the market is range bound between those two key levels and only after a break on either side materializes we can move on with new predictions. Breaking the upside would signal ETH has the potential to edge toward that key $2,000 resistance area.

Conversely, below $1,500 we see further weakness towards $1,400 and then $1,350.  On its way down, the price breached some short-term support levels and now we no longer have a clear upside trend. The bottoming could take a few days, in case our bullish scenario ends up being the right one.

DOGEUSD (Binance)

Although the crypto market rebounded to start 2023, the days when dog coins were leading by gains are over. Speaking of DOGE, the price is down more than 12% over the last week, suggesting market participants were dumping their holdings after a decent move up.

We can’t confirm a bottoming formation is in place since the price action activity looks rather choppy. A triangle formation can be drawn on the chart and we think the market will continue to consolidate inside until a break occurs. Upside resistance levels are 10, 12 and then 15 cents. Only a strong break above the third will confirm the bottom.

Below the triangle, 6.5 cents and then 5 cents are levels to watch. Considering the price traded above the daily 200 SMA for a decent amount of time, the sentiment is slightly in favor of buyers. However, we don’t see a strong bullish appetite and impulsive moves up, suggesting the bulls are not yet convinced a sustained rally can develop.