The Crypto Market Is Poised to Retest Its Highs

Market Overview

The crypto market continues to show low volatility, with little change from the previous day’s levels. At the $2.87T level, cryptocurrencies are cautiously forming a rebound from last week’s lows near $2.83T. However, as long as the market remains below $2.90T, it is technically in a short-term downtrend. The strengthening US dollar and uncertainty in the equity markets are adding to the unease. On the other hand, the crypto market has often been the first to react to shifts in sentiment, so it cannot be ruled out that this will be followed by an improvement in risk appetite in traditional markets within a day or two.

On Monday evening and at the start of Tuesday, Bitcoin found support on dips to $82.5K, having risen to $84K at the time of writing, and is back within the stabilisation range of the last seven days. The short-term working scenario is that BTC has found support on a pullback to previous highs, having cooled off sufficiently following the growth momentum. A sustained bullish sentiment paves the way for new multi-month highs above $87K.

If the crypto market is a leading indicator of global risk appetite, then Ethereum is an indicator of sentiment within the crypto space. Recording its seventh consecutive week of growth, Ethereum has avoided a relatively deep correction and, on Tuesday morning, climbed above $2.7K, down from last week’s high of $2.8K. Maintaining its bullish trend with considerable confidence, the second-largest cryptocurrency is making a second attempt to reach the $2.8K–$3.3K range, where consolidation took place from last November to this January, and where the coin may find itself in the coming days.