Market analisys after 14/01/2022

Market analisys after 14/01/2022

By Titto81 | Titto Crypto World | 15 Jan 2022


 

After updating the local high to $ 44400, the major cryptocurrency fell overnight to test the holding of the support area at $ 42K, where it is currently trading.

Market cap at $ 2029 billion.
BTC dominance index 39.7%.
Fear / greed index 21 points.

Equity markets priced in a violent pullback yesterday, with the NASDAQ down 2.51% and the S&P 500 down 1.42%.

Sales hit tech companies the most: Tesla fell 6.75%, Microsoft 4.23%

Such a dynamic seems to be attributable to a profit-taking triggered by the intervention in the US Senate by the representative of the Fed, who again stated that the priority of the central bank is the fight against inflation. I remind you that the inflation rate in the United States recorded in December is 7% and the Fed's target is 2%.

Obviously, the technology sector will be the one most affected by the possible tightening of monetary policy. And given the correlation between Nasdaq and the crypto market, at least in the short term this could trigger a further increase in volatility.

The dollar index has dropped below 95 points and a technical breakdown of the dollar index will undoubtedly be positive for the markets.

Furthermore, I reiterate that, net of the hysterics of the moment of the intraday traders, the Fed will proceed to a change of monetary policy in a gradual way, without compromising the performance of the stock markets.

Today the main drivers of the market will be the quarterly reports of the large US banks (JP Morgan and associates).

Bitcoin seems to have taken a break after the vigorous rebound of the past few days, penalized by the uncertain trend of equities.

Currently, the main cryptocurrency appears to have stabilized in the $ 42,500 area, with market capitalization still above $ 2 trillion and dominance below 40%.

Despite the high level of fear in the market, capital does not flow out of altcoins.

From an intra-day perspective, a consolidation in the $ 42500-44100 range is very likely, with possible renewal of local highs.

However, if equities continue to sell heavily today, we cannot rule out a breakdown of $ 42K and a return to the $ 42,000-40,000 trading range.

We also consider that today there is a very important expiry of options on Bitcoin, with max pain price at $ 44,000. So this level can act as a "magnet".

Arriving at the weekend with Bitcoin above 43K will be a prerequisite for a good increase in altcoins.

But in this context, it is better to evaluate with extreme caution any positioning on the alts. With BTC dominance at lows, it can be a major strategic mistake in the medium term.

If we analyze the on-chain scenario, the dynamics in 2021 were quite clear.

Long-term investors increased their respective positions in Bitcoin by 16%, while those of short-term investors decreased by 32%.

The usual shift of BTC from weak to strong hands.

While the deer are selling off their coins frightened by the correction taking place (after buying them on the highs), the big players continue to accumulate methodically.

To this must be added the attitude of the individual states. Let's take India.

Since 2018, there has been talk of an imminent ban on cryptocurrencies in India.

The ability to admit and correct one's mistakes is an important quality not only for a person, but also for a government.

Food for thought: Cryptocurrencies are legal in countries such as Switzerland, USA, Japan and Singapore, but prohibited in Syria, Egypt and Kyrgyzstan for example.

Compare these countries and you will understand what direction the world will take in the coming years.

 

Have a nice weekend!!!!

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Titto81
Titto81

Hello, my name is Giuliana and i'm from Italy. Have a nice day!!!


Titto Crypto World
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