TL;DR Breakdown
- Bitcoin continued retracement as it found support around $30,000.
- Ethereum set a new all-time high.
- Ripple continues consolidating in a triangle pattern.
The overall crypto market has seen mixed signals this week. This week’s market leader was Ethereum, as it gained more than 15 percent and set a new all-time high. Strong performance continued for Chainlink, which after a brief retracement, also set a new all-time high just below $26.
Weekly Crypto Price Prediction: Markets to reverse back to the downside this week?
Our recent article mentioned that Institutional Investors are not enough to save the Bitcoin market. This seems true right now, as the market is extended overall. However, retracements are slowly forming on most of the major coins. This likely indicates that investors are conservative right now, since jumping into a market that has extended itself so far, so quickly is a high-risk play.
Let`s take a look at some of the developments that Bitcoin as well as the major altcoins have had over the past week.
BTC/USD
Our last Bitcoin price prediction mentioned how BTC is currently struggling to keep its bullish momentum. This is clearly reflected in the chart. Bitcoin has made a clear lower low around $30,000 last week, after setting a lower high twice during January. The first being on the 19th and the second being on the 15th of January.
Since Bitcoin set a lower low at $30,000, the price of BTC/USD has continued to slowly retrace to the upside. So far important previous support of $34,000 has been tested as a resistance.
If Bitcoin shows signs of rejection for further upside, we might see another move to set another lower low this week. This would further cause panic in the market since price action that sets several lower lows and lower highs is a clear bear market signal.
Therefore, the analyst believes Bitcoin will see further downside this week, and traders could look for a short position entry around the current price levels.
Bitcoin price chart by TradingView
ETH/USD
Ethereum price prediction previously mentioned how ETH/USD has reached a new $1,467 all-time high as exchange outflow spikes. The all-time high, however, was quickly pushed back below the $1,440 resistance. If Ethereum continues rejecting further upside, the market will likely not see a further continuation to the upside for some time.
Therefore, we might see another move lower for Ethereum this week. A potential target for support is still seen around $1,100. If reached from the current price levels, Ethereum would lose more than 20 percent.
Smaller support between the current price and the $1,100 support is seen around $1,250. This level is also in confluence with the 100 period moving average.
Overall, the Ethereum price prediction is quite bearish for this week. Bearish developments for the price of Bitcoin will likely drag Bitcoin even lower.
Ethereum price chart by TradingView
XRP/USD
Ripple has continued to consolidate as it struggled to hit $0.30 in a descending triangle pattern for the past weeks. Several lower highs have been made since a substantial push higher was made on the 7th and 8th of January. Meanwhile, the horizontal support of around $0.26 continues to push the price back up each time it is reached.
Therefore, there is no clear trading opportunity for Ripple right now. It needs to break either above the descending trend line that forms the triangle pattern or break below the horizontal support. A break to either side should happen this week, as the area between support and resistance has grown increasingly smaller.
Once Ripple can manage to make its move, traders can expect another volatile move. The safest option, for now, would be to trade a break above the trendline.
For now, however, the best option is to stay neutral.
Ripple price chart by TradingView
LTC/USD
Litecoin has continued to move sideways for the past few days after a strong impulse to the downside set a higher low around $124. Since the $124 low was substantially higher than the previous major low around $112, the market has not yet shown clear signs of a reversal to the downside.
However, a clear lower high was set at $165 on the 19th of January. As it is around 11.5 percent lower than the yearly high of $186, Litecoin has indicated a clear lack of bullish momentum. The lack of bullish momentum should reverse Litecoin back to the downside to test the $120 area once again as mentioned in our previous Litecoin price prediction.
Therefore, Litecoin is essentially trading in an increasingly tighter range. Until either a higher high or a lower low is made, Litecoin will continue to move sideways this week.
Litecoin price chart by TradingView
LINK/USD
Chainlink has also performed great last week. Together with Ethereum, LINK set a new all-time high. However, Chainlink struggles to move higher since then as a retest of the all-time high around $25.5 resulted in a reversal to the downside.
Therefore, Chainlink should also see a much deeper retracement this week, allowing for more traders and investors to enter their positions. Right now, the price is simply too high to consider a substantial position as the risk/reward is not there. A potential area where support could be found on the way down can be seen at the 100 period moving average blue line, which currently trades just below $20.
Until a further retracement is seen, it is best to stay neutral for Chainlink.
Chainlink price chart by TradingView
Weekly Crypto Price Prediction: Conclusion
Overall our Crypto Price Prediction for this week is bearish. Most of the market has extended itself too far after setting new all-time highs. The others, like Bitcoin, Ripple, and Litecoin, struggle to move higher and increasingly look more bearish.
The bearish momentum could continue until early February. However, once the retracements complete, the overall crypto market would provide a much better price for new traders and investors to come in.
Therefore, the analyst suggests mostly to stay neutral this week. Short positions will likely be available, however, as always, shorting any cryptocurrency is very dangerous.
For further reading, see our latest news on why Crypto ransomware attacks rose by 311% in 2020, or read our latest guide on why Ethereum Gas Price is so high?
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
