Cryptos bounce back after the Omicron crash; Bitcoin holds $53,000
Cryptocurrencies got carried away on Monday as global markets rebounded sharply after the Black Friday stock market crash. This was due to the fact that investors reacted to fears of the new Covid-19 variant detected in South Africa: Omicron. In a clear "shoot first, ask questions later" move, as Oanda analyst Jeffrey Halley commented, investors and governments overreacted as, after the lessons learned from the Delta variant, they did not want to become complacent again. Buying is therefore the order of the day after Friday's falls, which were up to 10% for many assets.
Bitcoin is up 6% after falling to early October lows and testing the important support in the $53,000-$54,000 price range. Around this price range, purchases appeared, as predicted by the technical aspect of the world's largest cryptocurrency, according to José María Rodríguez, technical analyst at Bolsamanía. However, the upside is limited to $57,500 for now, as "market sentiment has turned fearful," stated Alejandro Zala, country manager at Bitpanda, adding "with large price gaps up and down, as the market liquidated millions of long and short positions due to volatility."
The Crypto Fear & Greed Index hovers around 30 points, down about 20 points from a week ago, with declines toward "extreme fear" over the weekend. "The index suggests that market participants are in "fear mode," which some traders see as a contrarian signal: at this point, buyers who exited when greed was at extreme levels gradually tend to return to the market," Zala noted.
"What price has made clear to us is that as long as it does not confirm above $60,000 we will not have any sign of strength and therefore the corrective phase remains intact," commented Rodríguez. "Only above $60,000 will we consider it over, with a target at the annual and historical highs of approximately $69,000."
ETHEREUM CONTINUES TO DEMONSTRATE AN EXCELLENT OUTLOOK
The prices of most alternative cryptocurrencies ('altcoins') also plunged on Friday. Ether, the second-largest cryptocurrency by market capitalization, briefly dipped below $4,000 on Friday and again on Sunday, despite Ethereum, its underlying blockchain, reaching a new milestone.
Data from Dune Analytics showed that unique addresses on Ethereum - the total number of decentralized finance users on the blockchain - topped four million this past week. However, Ether rebounds above $4,300, on Monday.
Technical analysis of the second-largest cryptoasset by market capitalization indicates that $4,000 has become formidable support for Ether and technical indicators continue to point to $10,000 as the upside target. Everything seems to indicate that a rally is brewing for Ethereum.
The token's all-time high at $4,884 is now the first resistance to overcome and, if successful, the upside is projected to approximately the upper limit of a bullish pennant at $5,252. "The 97% upside towards $10,418 would then be on the radar, but the token would face several hurdles, including the 127.2% Fibonacci extension level at $5,762, and then at the 161.8% Fibonacci extension level at $6,866," analyst Sarah Tran wrote at FXstreet.com.
The rest of the 'altcoins' present a similar picture and the total market capitalization has risen to $2.5 trillion.