After a weak start to this week, Bitcoin (BTC) has bounced back from its crucial support levels of $40,000. As of press time, Bitcoin is trading 0.54% up at a price of $42,192 with a market cap of 797 billion.
Bitcoin has been just replicating its previous performances over this time. Popular crypto analyst Lark Davis writes:
Bitcoin peaked out at -42.5% under the previous high yesterday. For reference The mid year 2021 mini bear was -55% at bottom. Nothing out of the ordinary for BTC, although likely terrifying for new investors.
Furthermore, as we at CoinGape reported, the Bitcoin RSI levels were clearly pointing out that we were in oversold territory on the daily chart on Monday. In we look at the historical chart, Bitcoin has found exact support, the last time it was found during September 2021.
There’s further downside support for Bitcoin at around $37.5K levels (red circle). Even Galaxy Digital founder Mike Novogratz had predicted that Bitcoin could test $38,000 as the bottom and this is where institutional players will likely chip in.
One can still hold up the early excitement as we need to reclaim the 50-day and 200-day Moving Average to confirm the uptrend. All eyes will be on the U.S. releasing its inflation data ahead of this week on Wednesday. If the inflation numbers turn out to be higher than expected it could further dampen the prospects of a strong recovery.
Will Altcoins Follow the Trend Reversal?
Although bitcoin rebounds, some altcoins have yet to follow. For e.g. Ethereum (ETH) has yet to rebound and is trading in the red zone at $3117. ETH too has corrected by 40% from its all-time high.
However, some altcoins have been really doing well in this market downtrend. For e.g. Terra’s LUNA rallied by 100% in December all the way to hitting a new all-time high of $100. So has Polygon’s MATIC and now Chainlink (LINK). These three altcoins could be potential performers for this month of January.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.