Technical Analysis

Bitcoin has approved a reversal to growth but needs tactical respite

The bitcoin price has surpassed $21K,
adding around 23% over the week. Ethereum jumped 20% to $1570. Other leading
altcoins in the top 10 gained between 9% (BNB) and 50% (Solana). Solana has
re-entered the top 10, pushing Polygon aside.

The total capitalisation of the crypto
market, according to CoinMarketCap, rose 18.4% over the week, once again
approaching $1 trillion.

It’s easy to see that Bitcoin was
outperforming this time, which can easily be attributed to the positivity of
the stock market last week.

The first cryptocurrency also responded
very well to technical signals. Since securing above the 50-day average on
January 4, bitcoin has been closing all days with gains. A consolidation above
the previous local high and a break of the downtrend resistance caused an
acceleration in growth. BTCUSD closed above the 200-day average on Friday, contributing
to the weekend’s positive momentum.

Trading near the $21K level brought quotes
back to the area before the FTX crash, and this is a new test of the local
highs. Traders might want to be prepared that the market will need a short-term
correction towards $19.5K before we see another momentum, as locally, Bitcoin
looks overheated.

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News background

The US Securities and Exchange Commission
(SEC) has charged cryptocurrency exchange Gemini and crypto lending service
Genesis with selling unregistered securities.

Crypto lending platform Nexo recorded a
significant outflow of customer funds amid reports of searches at its Bulgarian
office as part of an investigation into potential AML policy violations.
Authorities have accused the crypto bank of money laundering, tax
irregularities, fraud and providing banking services without a licence.

The Republican Party, which won a majority
in the lower house of the US Congress late last year, has begun forming a
subcommittee to regulate cryptocurrencies.

The new CEO of cryptocurrency hardware
vendor Trezor, Matej Zak, said the financial independence that bitcoin brings
is far more important than its market value. He said there will be a
consolidation of the crypto market in 2023 and then a bullish trend, which
Trezor plans to prepare for.

This article was written by FxPro’s Senior Market Analyst Alex

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