Bitcoin’s strong start to the new year appears to be losing steam, raising concerns about the sustainability of its upward momentum. As per the current data, Bitcoin is valued at $102,092.06, marking a 3.88% dip following a slight pullback from a peak of $106,214. While the broader trend remains optimistic, signs of exhaustion are becoming evident. A key observation is Bitcoin’s adherence to its ascending trendline, which has been pivotal in maintaining its bullish trajectory.
Despite this dip, Bitcoin remains above critical support zones, signaling the rally initiated in late October is still active. The 50-day EMA continues to provide consistent dynamic support, but if selling pressure intensifies, the $98,400 and $97,500 levels might act as defensive barriers. Monitoring trading volumes is also crucial—diminished buying activity in recent sessions could indicate waning bullish energy.
BTC/USDT CHART/TradingView
Breakout Potential and Near-Term Risks
A breakout beyond $106,000 might have encouraged a new wave of buyers, but the lack of follow-through hints at a temporary pullback rather than a full-fledged reversal. For now, Bitcoin’s short-term outlook hinges on maintaining its position above the trendline. A break below this could expose the cryptocurrency to further losses, with significant support near $90,000 acting as a safety net.
While Bitcoin retains its bullish bias, corrections like this are natural during prolonged rallies. The overall uptrend remains intact, but for the rally to continue, Bitcoin must achieve a decisive close above its previous high. Failure to do so might lead to a period of consolidation or a more extended market cooldown.
Ethereum Struggles to Sustain Momentum
Ethereum is showing signs of vulnerability after failing to maintain its upward drive near its recent local high of $4,100. Currently trading at $3,686.97, down 10.07%, Ethereum’s minor retracement raises concerns about a potential bearish shift in its trajectory.
Key Support Levels Under Threat
The initial red flag is the decline from its recent peak. Ethereum is struggling to stay above the 20-day EMA, a key short-term support currently around $3,707, after weeks of strong upward movement. Should this level fail to hold, the next critical support is the 50-day EMA near $3,355.
A breach below these levels could signal a change in market sentiment, possibly driving Ethereum closer to the psychologically significant $3,000 mark. Volume analysis further underscores this concern; while Ethereum experienced a surge in activity in November, recent trading sessions indicate diminishing buying interest.
Bearish Divergence Signals
This reduction in purchasing pressure suggests weakening bullish momentum, leaving Ethereum vulnerable to additional selloffs. On the technical front, a bearish divergence appears to be forming, as the RSI hovers near 63—a level often associated with a slowdown in bullish energy. A continued RSI decline could confirm a deeper bearish trend.
Despite these short-term challenges, Ethereum’s long-term outlook remains positive as long as it holds above crucial support zones. Investors should watch the $3,707 and $3,355 levels closely, as rebounds from these points could reignite bullish momentum and set the stage for recovery.
Dogecoin’s Struggle to Retain Support
Dogecoin continues to face challenges as its price steadily declines, struggling to hold above key support levels. Trading at $0.3629—a 5.47% drop in the past day—the technical outlook for the meme-based cryptocurrency remains concerning. Recent price action indicates that Dogecoin has fallen below its ascending channel, which previously acted as a strong support during its rally.
The $0.45 zone has now turned into a significant resistance level due to the failure to sustain upward momentum. This breakdown positions Dogecoin close to its 50-day EMA at $0.35. While this level offers technical support, its rapid testing shortly after the rally is troubling.
Volume Decline as a Warning Signal
Adding to the bearish sentiment is a decline in trading volume, which highlights weakening buying interest. The lack of demand suggests hesitance among DOGE bulls, leaving the asset exposed to further losses. If the 50 EMA fails to hold, the next critical support lies at $0.28.
A drop below $0.28 could lead to a more pronounced correction toward $0.21, a level last seen before November’s breakout. On the RSI front, Dogecoin is not yet oversold but currently sits at 56, signaling growing downward momentum.
If the RSI continues to fall, it could confirm bearish dominance in the market. Observing broader trends and external catalysts will be key to assessing Dogecoin’s potential to reverse its current course.
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