Crypto Market Review, January 24th

image of the article

Arman Shirinyan

Markets are at a pivotal point: we either see a long-term reversal or a continuation of the downtrend

Markets are still hanging on by a thin thread as most assets have faced local resistance and haven’t advanced in the past few days, which is nothing but a healthy consolidation, and the situation could change at any moment.

Dogecoin’s important signal

As mentioned in our previous previews, Dogecoin was on the verge of receiving a fundamental reversal signal, the crossover between the 50- and 200-day moving averages, also known as the “golden cross”. It is usually considered the initial signal for a long-term reversal as it suggests that the medium-term movement of the asset is prevailing over the long-term movement.

DOGE chart
Source: TradingView

Considering the rise of the meme asset in the market, Dogecoin’s suppressed performance has caused some concern, but at the same time, there is no need to worry or bet on the asset flipping just because of lack of momentum.

In due course, we could see the acceleration of the rally thanks to the mentioned signal and the general recovery of the market.

Ethereum is halting

After a solid recovery a few days ago, Ethereum was facing some problems on its way up as it was unable to break the local resistance level at around $1610. While it may appear that the 200-day moving average is a barrier that the second largest cryptocurrency on the market cannot break, this is not necessarily true.

If we look at the chart, it becomes clear that the line connecting the local peaks over the four-month period is the real resistance that Ether has to break. Unfortunately, it doesn’t seem like Ether is taking it down on its own, without the support of the rest of the market.

According to ultrasound.money, Ethereum issuance has normalized and the cryptocurrency has once again become deflationary. However, constantly burning ETH is not enough by itself as it does not directly affect the performance of the second largest cryptocurrency in the market.

However, the recovery of burning operations on Ethereum is the result of increased network activity, which could lead to an improvement in Ether’s market performance, as it usually depends on the revenue of validators, solutions and companies on the network.

Market breakthrough

The short-term bullrun that recently started in the cryptocurrency market would not have been possible without the recovery of traditional markets. The S&P 500 index, which reflects trends in the markets in general, has also been on an upward trajectory over the past few weeks, but it ran into resistance soon after.

For now, it has already managed to break through the long trendline resistance level and could consolidate above it, triggering another wave in crypto and traditional markets. However, some experts assume that this is nothing more than a fake in the midst of a bear market, and investors should prepare for a reversal and a continuation of the trend that we have been witnessing since the end of 2021.

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