Crypto Market Outlook 7th January 2024

elcome to another crypto market outlook for the 7th of January!
In this edition, we'll delve into major assets such as US500, DXY, Gold, Bitcoin, and Ethereum, highlighting critical levels and potential trade setups.

From Bitcoin's continued bullish trend to ETH hovering inside a narrow range, and the Fear & Greed Index starting the year with “Greed”, this article covers it all.

Are you ready?

‍‍Today, we will cover the following topics:‍

- Market Heatmap and Fear and Greed Index
- US500, DXY and Gold Analysis
- USDT.D, Bitcoin and Ethereum Analysis
- Quotes / Advices
- Closing Remarks‍

Market Heatmap and Fear and Greed Index‍

To initiate my research, I delved into the analysis by examining the market heatmap, which provided a comprehensive overview of the entire cryptocurrency market.

For the third consecutive week, BTC has maintained consolidation within a narrow range, displaying a modest 3.93% increase this past week.

Despite this, the heatmap indicates an overall bearish sentiment, influencing negative price movements across various altcoins, including ETH.

The Fear & Greed Index has consistently indicated 'Greed' for nearly two months. This ongoing signal suggests that traders maintain an optimistic outlook and continue to actively invest in the crypto market as the new year begins.

‍US500, DXY and Gold analysis

‍We consistently monitor the US500 index to assess the current market sentiment. This practice is crucial because the cryptocurrency market often exhibits a significant correlation with the stock market, and this interconnection can impact its fluctuations.

This week, the US500 rejected the all-time high area and traded lower. For the bulls to regain control from a long-term perspective, a breakout above $4825 is needed.

On the 4-hour timeframe, the bears took over this week by breaking below the last major low highlighted in red.

For the bears to remain in control, a break below $4650 is needed. In this case, a movement towards $4550 would be expected.

In parallel, for the bulls to regain control from a medium-term perspective, a break above the last high in orange at $4728 is needed. In this case, a movement towards the all-time high will be expected again.

We consistently monitor the DXY - USD Index as part of our routine analysis. This is crucial because the value of nearly all assets, including BTC/USD, is closely tied to the USD, which serves as the benchmark currency in the financial market.

The DXY is currently retesting a weekly resistance zone marked in orange. As long as $102.7 holds, we expect a bearish continuation towards the $100 support.

If the $102.7 resistance is broken upward, we anticipate a medium-term shift in momentum.

On the 4-hour timeframe, the overall bearish trend of DXY is evident as it trades inside the falling channel in red.

The bias will remain bearish unless the channel and $102.7 are broken upward. In this case, a movement towards the $105 resistance would be expected.

In parallel, if the $101.9 previous major low is broken downward, we expect a continuation till the lower bound of the channel and $100 round number.

This week, Gold rejected our all-time high zone of $2078 - $2100 and traded lower. For the bulls to remain in control and take over from a macro perspective, a daily candle close above $2100 is needed.

Meanwhile, the bears would be in control and can push the price till the lower trendline in blue.

In the 1-hour timeframe, as per our last week's analysis, the bears took over in the short term after breaking below the last minor low at $2062.

Gold will remain bearish as long as it is trading inside the falling wedge pattern in green, and a movement towards the $2000 round number and support would be expected.

USDT.D, Bitcoin and Ethereum analysis

As a standard practice, I initiate my analysis with USDT.D as it serves as a key indicator of traders' sentiment. USDT.D provides valuable insights into whether traders are optimistic, suggesting increased investment in cryptocurrencies, or pessimistic, indicating a shift towards stablecoins.

USDT.D is still hovering inside a narrow range around a robust resistance.

For the bulls to take over, we need a daily candle close above 5.83%, which might not be favorable for the overall crypto market.

In the 4-hour timeframe, to shift the momentum from bearish to bullish, we need a breakout above the last major high highlighted in red at 5.83%.

Meanwhile, USDT.D would remain bearish as long as it is trading inside the falling channel in red, and if the last minor low at 5.66% is broken downward, it could lead to a bearish continuation till the 5.2% support.

BTC is still maintaining an overall bullish stance as it trades within the rising broadening wedge pattern outlined in orange.

We anticipate further bullish movement towards the upper bound of the wedge and the $48,000 resistance zone from a medium-term perspective.

In the 4-hour timeframe, BTC has been trading inside a narrow range between $41,000 and $45,000 in the form of a rising channel highlighted in orange.

For the bulls to regain control, a break above the $44,850 local resistance is needed, potentially leading to a movement towards $48,000.

Meanwhile, as BTC approaches the lower bound of the triangle at $41,500, we will be looking for short-term buy setups on lower timeframes.

For almost an entire month, ETH has been trading inside a range between $2100 and $2450.

To shift the momentum in favor of the bulls from a long-term perspective, a break above $2450 is needed, potentially leading to a movement towards the $3000 resistance.

Meanwhile, as ETH approaches the lower bound of the range at $2100, we will be looking for short-term buy setups on lower timeframes.

On the 4-hour timeframe, for the bulls to take control from a medium-term perspective, a break above the last major high in gray at $2295 is needed.

Meanwhile, ETH could maintain a bearish stance and potentially test the lower bound of the range.

Quotes / Advices

Be a Trading Maestro.

Craft your trades like a musical masterpiece. Each move is a note, and the market is your melody. Harmonize your strategies for a symphony of success.

Diversify your investments, creating a crescendo of opportunities. Let each asset play its part in the financial orchestra.

Embrace the improvisational nature of trading. Navigate the unpredictable rhythm of the market with style and flair.

Stay in tune with market trends. Learn to read the sheet music of global events, adjusting your notes accordingly.

Keep your emotions in harmony. Trade with the coolness of a jazz saxophonist, avoiding dissonance in your decision-making.

Closing Remarks

In summary the crypto market experienced a week of consolidation with Bitcoin (BTC) showing a modest 3.93% increase while maintaining a narrow range.

However, the overall market sentiment appeared bearish, impacting various altcoins, including Ethereum (ETH).The Fear & Greed Index signaled 'Greed' for nearly two months, indicating traders' optimism and active participation in the crypto market.

In the traditional markets, the US500 index rejected its all-time high, suggesting a potential bearish trend.

The DXY (USD Index) displayed a bearish trend, with a key resistance at $102.7, influencing various assets, including BTC/USD.

Gold faced resistance at $2078-$2100, with the need for a daily close above $2100 for bullish momentum.

In the cryptocurrency realm, USDT.D, a key sentiment indicator, hovered near a strong resistance.

BTC maintained a bullish stance within a rising broadening wedge, while ETH traded within a range of $2100-$2450.