As support moves away and bears sell at every rally attempt, Bitcoin (BTC), and many major altcoins are still under pressure. The Crypto Fear & Greed Index fell to 10/100 on January 8, one of its lowest ever readings. Comparatively, 2021 started on a bullish note, with levels of 93/100 indicating “extreme greed.”
Mike McGlone, a Bloomberg Intelligence analyst, is not disillusioned by the weak start to the year. He remains bullish. In a recent analysis, he said that Bitcoin could rally to $100,000 this year and Ether (ETH), to $5,000.
Daily view of crypto market data. Source:Coin360
Analysts believe that Bitcoin will struggle to maintain its bullish tendency in an environment with rising interest rates. Holger Zschaepitz asked if Bitcoin would be able to withstand “rock-bottom rates” and trillions in central bank money.
Is Bitcoin likely to rebound from the strong support and attract buying in selected altcoins. Let’s look at the charts of top-5 cryptocurrencies which may be positive in the near term.
Bitcoin’s downtrend reached strong support at $39600. On Jan. 8, the price formed a Doji candlestick structure, indicating indecision between the bulls as well as the bears.
Daily chart of BTC/USDT Source: TradingView
Both moving averages are falling and the relative strength indicator (RSI), is close to the oversold zone. This indicates that the path of least resistance lies to the downside. If the price falls below $39,600 bears could increase the selling and the BTC/USDT exchange could begin its journey to $28,805.
However, if the price moves higher than the current level, it could reach the 20-day exponentially moving average ($45.876). This will indicate that traders are buying rallies and the sentiment is not changing. This will increase the chances of a break below $39600 I
To indicate a change in trend, the bulls must push the price higher than the moving averages.
BTC/USDT 4-hour chart. TradingView
The 4-hour chart shows that selling momentum increased on a break and close under $45,456. The bulls are trying to stop the decline at $40.501, but it is likely that the recovery attempt will face strong selling close to the 20-EMA.
If the price falls below the 20-EMA, bears will try to bring the pair down below $39,600, and extend the downtrend.
A break above the 20-EMA may push the pair towards the 50-simple average. Bulls pushing the price higher than this resistance will indicate that bears are losing their grip.
Chainlink (LINK), has traded in a wide range between $15.33 and $35.33 over the past few months. The price has risen above the moving averages, and the RSI is close to the overbought area. This indicates that buyers are in control of the short-term.
Daily chart for USDT LINK. Source: TradingView
For the past few days, the bears presented a formidable challenge at $27.61 but the bulls prevented the price from falling below the 20-day EMA ($23.23). This shows that sentiment has changed from buy on rallies to sell on dips.
The LINK/USDT pair can rise to 30 if bulls keep the price above $27.61. After that, it could reach the overhead resistance of $35.33. If the price falls below the moving averages, this bullish view is invalid. This could lead to a drop in the pair to $18.
LINK/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that price broke above $27.61 overhead resistance. The bears will attempt to stop the upward movement at $30. The possibility of a rally up to $35.33 will increase if the next correction doesn’t break below $27.61.
Contrarily, if the price falls below the current level it will indicate that the $27.61 break may have been a bear trap. The bears will attempt to lower the price below 50-SMA. The next stop for bears could be $22.
Internet Computer (ICP), broke above the downtrend line Jan. 4, which was the first sign that the downtrend might be ending. The bears attempted to trap aggressive bulls and bring the price below the 20-day EMA ($29), but failed.
Daily chart of ICP/USDT TradingView
Bulls pushed the price higher than the downtrend line on January 8. Bulls are trying to make a comeback. The moving averages appear to be on the brink of a bullish crossover, while the RSI has jumped in the positive zone.
The ICP/USDT pair could rise to $45.79. If buyers continue pushing the price higher than $38.02, it may be possible for the ICP/USDT pair to rally if the price is sustained above $38.02. Although this level could be a stumbling block, if it is overcome, the upward-move could reach $58.30.
Contrary to the assumption, if the price falls below the 20-day EMA and the current level, it may indicate that the breakout above this downtrend line was a bull trap.
ICP/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows bulls pushing the price higher than $33.29, but they are still struggling to overcome the $38.02 hurdle. This indicates that bears are selling near the overhead resistance. The pair has remained between these two levels.
The pair could continue its upward-move if bulls push the price higher than $38.02. If the overhead resistance is broken, bears will try to lower the pair to $33.29. The pair could fall to the 50-SMA if they succeed.
Related: This crypto trading algorithm’s $100 bag still has value after the pullback. It now is worth $20,673
UNUS SED LEO has been trading in a steady uptrend over the past few weeks, with the 50-day SMA ($3.55) acting as strong support.
Daily chart LEO/USD TradingView
Although the bears tried to push the price below its 50-day SMA, the bulls refused to give up. The strong rebound on January 8 saw the LEO/USD pair rise above the $20 EMA ($3.69).
Bulls will attempt to push the price higher than the record $3.92. The pair could resume its upward trend if they succeed and may reach $4.25. If the price falls below the 50-day SMA, this positive outlook will be invalidated. This could lead to a correction of $3.40.
LEO/USD 4-hour chart. TradingView
The pair was trading in an ascending channel pattern. The bears resisted at $3.85 which could have attracted short-term traders who were looking to make a profit. This brought the pair to the channel’s support line, where buyers intervened and stopped the slide.
The bulls are trying to push the price higher than $3.85. The pair could begin its climb towards the resistance line of this channel if they succeed. To invalidate the bullish view, the bears must sink below the channel and maintain it there.
For the past few days, Harmony (ONE), has traded between $0.33 and the 20-day EMA ($0.27) for the past few trading sessions. This indicates that bulls are buying dips while bears are selling rallies.
Daily chart of ONE/USDT Source: TradingView
Buyers will be able to take advantage of the rising 20-day EMA, and the RSI that is in the positive territory. The up-move may resume if bulls push the price higher than $0.33. The ONE/USDT currency pair could then try to climb to $0.38.
Contrary to popular belief, a price break below the 20-day EMA will indicate that the bears have outnumbered the bulls. This could bring the pair to the 50-day SMA ($0.24), and then to $0.21.
ONE/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows a rising channel pattern. Bulls drove the price higher than the channel but they couldn’t sustain it. This indicates that bulls were being caught by bears.
Although the price fell back into the channel, a minor plus is that it bounced from the 50-SMA. This shows that bulls are still buying on dips and sentiment is positive.
The resistance line could be reached if the price rises above 20-EMA. A breakout and close above the 50-SMA could indicate a pickup in momentum. A break below the 50 SMA could signal a pick up in momentum.
You should research all aspects of trading and investment before making any decision.
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.