BTC has been trading within a $41,500 to $43,900 range for the past two weeks. It broke above this range on Wednesday night after the US session, consolidating around $44,500 yesterday before marching higher in the US session. Overnight, BTC surpassed the $45,500 resistance, peaking just below $46,400, and is now continuing upwards and trading above $46,600. The next resistance level for BTC is $46,800. A breach of this level could see a quick move to $47,800, with a subsequent target of $49,000 — the top achieved on the first day of the spot ETF launch. The first support level is at $46,000, followed by $45,200. Holding above the $45,200 level would be a strong medium-term bullish indicator, especially as the overall market structure remains bullish in the long term.
With bitcoin’s dominance surpassing 53%, ethereum is trailing behind bitcoin, despite analyst expectations for a spot ETH ETF launch in May. Ethereum broke out of its two-week range, surpassing $2,400 on Wednesday evening, and is now trading above $2,450. Its next resistance levels are at $2,520 and $2,680, with $2,400 and $2,280 acting as its primary support levels. From a trend perspective, the ETH/BTC ratio remains bearish, hovering around the critical support level of 0.053. A consistent break below this could lead to levels between 0.05 and 0.051. However, ETH is known for its surprises. While I favour BTC in the short term, I am open to increasing my ETH allocation should it reach the 0.05 to 0.051 range.
On the altcoin side, SOL reclaimed the $100 mark after a network outage. This suggests a potential for further gains, mirroring its resilience in 2021 when previous outages failed to halt its upward trajectory.
Regarding volatility metrics, bitcoin’s 30-day ATM implied volatility increased to 44% (+3% WoW), while ETH’s surged to 45% (+5% WoW). Last week’s shift in the 25-day delta skewness from negative to positive was again a good indicator for this week’s rally, which remains positive (bullish) for both BTC and ETH on all timeframes.
On the macro side, January’s US ISM non-manufacturing PMI release on Monday exceeded expectations at 53.4, surpassing the forecasted 52.0 and December’s 50.5, indicating economic expansion. Additionally, non-manufacturing prices rose from 57.4 to 64.0, further signalling robust economic activity.
This week, equities have been rallying (S&P 500 hitting 5000 intraday) with positive earnings across sectors. The primary concern is the potential collapse of the US regional banking sector, which would likely prompt the Federal Reserve to inject liquidity again.
Chinese markets will be closed for Chinese New Year next week, potentially reducing crypto market liquidity during the Asia session. Key economic events to monitor include US CPI on Tuesday, US Retail Sales on Thursday, and US PPI on Friday.
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