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The cryptocurrency market was on the verge of collapse. However, eventually it managed to consolidate its key positions and recover. The cryptocurrency leaders bitcoin and ether were the main reason for positivity. The main cryptocurrency managed to consolidate at $40,000 and recover above $44,000, breaking the upper boundary of the downward channel. Ethereum pushed back from its 365-day moving average and reached $3,300. The positive price trends of the market leaders may indicate a trend reversal, however is it true?
Bitcoin gained 2.5% and made a breakout of the descending parallel channel in the last 7 days. The cryptocurrency has been trading within this range since December 27. The rebound began after consolidating at $40,000. Breaking this level stimulated large buyers and a great number of purchases turned an impulsive upward movement. As of 17:00, the asset is trading around $44,000 where it formed a local support area. The coin pulled back below this figure after the impulse growth. However, the data on 7% US dollar inflation again favoured the quotations to climb above $44,000.
The cryptocurrency is trying to consolidate the support area and continue the upward movement. The nearest price's target will be the level of $45,800 with a strong resistance line and the upper boundary of the medium-term downtrend from November 9. The news and the fundamental background contribute to bitcoin's upward trend. Technical indicators also signal further growth: MACD completes the formation of a bullish crossover, while the stochastic oscillator and RSI index remain in a bullish zone. All of these factors suggest that bitcoin will maintain its current positions and continue its upward movement.
Ethereum began its recovery on January 10 when the price touched the 365 EMA. The altcoin managed to climb $3,300 due to a strong bullish rebound and bitcoin's rise. I assume that the coin will continue to rise to the level of $3,500-$3,600, where several key resistance levels are concentrated. First of all, the Fibo level of 0.382, the downtrend line of the short-term trend and the mirror level are in this area. Taking this fact into account, I assume that the correction of the main altcoin is not completed and the price will retest the level of $3,000 again. However, this support level is unlikely to be broken as the main buying interest of investors is focused on this zone.
Overall, the situation in the cryptocurrency market becomes optimistic. However, it is significant to realize that consolidation in a wide range is a positive signal for the market. Investors still have fear, and therefore it is too early to open long positions. I predict that in the next week and a week and a half the cryptocurrency market will recover and hit the local highs.Manipulation is likely during this period, so long-term forecasts are very unreliable. Taking it into consideration, it is too early to say that there has been a market trend reversal.
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