Market Report January 18 2021

This article was first published on Metal Blog
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Bitcoin

Price action for BTCUSD has been remarkably clean since breaking through its 2017 high at $20k. New support and resistance levels have been established as price climbs, providing high levels of intraday volatility.

Zooming out for a more macro view, the daily chart shows ranging between $30k and $40k. A swift sell-off last Monday dipped below range support but closed the day above it, showing support being established and remaining within the range. Until range support breaks, it’s good news for Bitcoin bulls.

Ethereum

ETHUSD is showing similar price action to BTCUSD prior to its all-time-high break of $20k. Consolidating is shown just below resistance with its all-time high of $1400’s only about 15% above. With range support in the $900’s and daily closes remaining above $1,000 to $1,100, Ethereum bulls are in safe territory.

Fundamentals & Correlations

Below are the monthly candle charts for Bitcoin Dominance (left) and the U.S. Dollar Currency Index (Right).

Historically, Bitcoin dominance is a good guide for picking your spots for “altcoin” investments.

When dominance trends up, altcoins will be more impacted by the moves of BTC, and more often than not, they will be outperformed by BTC; when it’s falling, and particularly below 60%, altcoins tend to move independently of Bitcoin and the elusive “alt season” occurs.

When The US dollar loses strength, the USD value of assets typically increases, and the index develops an inverse correlation with Bitcoin price in particular. You can see that the DXY has been down-trending for the past 12 months, and appears to have painted a double top on this monthly pattern. This suggests a longer-term downtrend could be on the horizon.

For Bitcoin dominance, it could be topping out, or it could be on the verge of a bullish breakout, with Bitcoin price following ...

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