BTC Patterns, ETH at $3K, and Fear Index Falls

Welcome to another crypto market outlook for the 12th of January!

The crypto market has shown no clear direction in January so far, with both BTC and ETH hovering within a large range. Is the alt season on the horizon? If so, when can we expect it? Let’s explore the possible scenarios.

‍‍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

‍ETH is preventing the start of altcoin season, having dipped by over 10%, dragging the entire market down with it.

The only altcoins that had a positive week are the OG U.S.-based coins like HBAR, XRP, and XLM.

After signaling greed for several months, the Fear and Greed Index has dropped from 76 to 62 this week.

This indicates that corrections are occurring more frequently than usual, and crypto traders' greed is cooling off.

US500, DXY and Gold analysis

The stock market remains bearish this week, as evident from the bearish candles on the US500.

However, the overall momentum remains bullish in the medium term, as the US500 is still trading above its last major low of $5,790.

In the short term, the US500 has been trading within the falling channel marked in red.

For the bulls to regain control, a break above the last major high of $5,880 is required.

The DXY, on the other hand, remains bullish, trading within the rising channel marked in blue.

As long as the channel holds, every bearish movement is likely to be a correction, followed by another bullish impulse.

In the short term, based on the 4-hour timeframe, the DXY is approaching the upper boundary of its range, forming a flat rising broadening wedge pattern marked in red.

If the upper red and blue trendlines hold, it will indicate an overbought zone, likely driving the price downward.

As anticipated in our previous Gold analysis, it rejected the daily orange trendline and has been bullish ever since.

Gold is now approaching a strong structure marked in blue. For the bulls to gain long-term control, a break above this level is required.

This week, Gold broke above our $2,640 structure and moved higher in a parabolic manner.

As it hovers around the daily structure and the upper boundary of the red wedge pattern, we anticipate the bears to step in soon, initiating a correction phase.

USDT.D, Bitcoin and Ethereum analysis

As predicted in our last USDT.D update two market outlooks ago, it is now rejecting the upper boundaries of the orange and red channels.

This signifies a strong resistance zone where the bears are expected to step in.

For the bears to take full control and initiate the next bullish phase for crypto, a break below the last low, marked in orange at 4.2%, is required.

In the meantime, USDT.D remains bullish in the short term and could still trade higher to test the upper orange trendline.

As highlighted in our last roundup article, BTC has formed the right shoulder of the head and shoulders pattern.

However, for the head and shoulders pattern to be activated and a deep bearish correction to begin, a break below the $91,000 neckline is necessary.

Meanwhile, as BTC hovers around the lower boundary of its range, the bulls would need to break above the last high, marked in orange at $96,000, to regain short-term control.

ETH is approaching a strong rejection zone at the intersection of the lower red trendline of the falling channel and the $3,000 round number.

As long as the $3,000 support level holds, the bulls are expected to step in for a bullish correction soon.

For the bulls to initiate a correction phase toward the $3,500 resistance level, a break above the last high, marked in red at $3,350, is required.

Meanwhile, ETH will remain bearish and could still dip toward the $3,000 mark.

Quotes / Advices

‍Many investors make the mistake of buying high and selling low while the exact opposite is the right strategy to outperform over the long term.
~ John Paulson

Closing Remarks

‍In summary, The Fear and Greed Index has declined from 76 to 62, indicating reduced market greed and more frequent corrections.

The DXY remains bullish overall, trading within a rising channel, but is approaching overbought levels in the short term.

Gold has shown bullish momentum, rejecting the orange trendline and breaking the $2,640 structure, but a correction phase is anticipated soon.

USDT.D has reached a strong resistance zone, and a break below 4.2% is needed for bears to take control and potentially trigger the next crypto bullish phase.

BTC is forming a head-and-shoulders pattern, with a break below $91,000 required to activate a bearish correction.

Meanwhile, ETH faces strong resistance at $3,000, with potential for bullish correction if support holds, though it remains bearish short term unless it breaks $3,350.