Cryptocurrencies have started the year poorly, dropping about 30% over the past three months. Many have fallen below key long-term indicators, like the 200-day moving average, entering a deeper bear market.
US president Donald Trump's announced strategic crypto reserve falls short of his bold election promises, including “bitcoin is going to the moon”, “crypto is going to define the future”, and “the US [will be] the crypto capital of the world.” Expectations were too high, and many cryptocurrencies have since lost the gains made after his election win.
The crypto market is in turmoil, with some benchmarks forming a primary bearish trend. Short-term rebounds could be seen as potential exit opportunities for short positions.
Given the high volatility and oversold conditions of cryptocurrencies, any rebounds could be substantial. For instance, a 38.2% correction from the 2025 drop could push solana towards its 200-day simple moving average (SMA) at $179.39 and ethereum toward its medium-term downtrend near $2,571.
Bitcoin remains the exception in the crypto market, showing greater relative strength despite the broader downturn. It has stayed above its 200-day SMA, maintaining a long-term bullish structure.
Key support is at the yearly low of $76,611. On the upside, bitcoin faces critical resistance at $89,199 and $91,316, as well as the medium-term downtrend from this year's highs.
Bitcoin is once again gaining strength against other cryptocurrencies in a correction, weakening other currencies by comparison. For example, the ratio between ethereum and bitcoin has reached lows not seen since 2020.
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