Bitcoin (BTC), which fell to close to $34,000 Jan. 21 represents a 50% decrease from the Nov. 10, 2021 all-time high of $69,000. Altcoins were also unable to buck the trend. They faced intense selling pressure that dragged the total crypto market capitalization down to $1.6 trillion. This represents a 46% decrease from the November 2021 all time high of near $3 trillion.
Investors are not just selling crypto markets. The S&P 500 also fell 8% over the past year. But gold has performed better and has risen by around 1.76% over the same period, cementing its status as a safe-haven asset.
Daily view of crypto market data. Source:Coin360
Many retail traders who bought Bitcoin at a near-record high price are now voicing concerns via social media. The recent drop in Bitcoin prices has not spooked El Salvador’s President Nayib Bukele, who recently announced that he would be purchasing 410 Bitcoin at an average of $36,585 per coin.
Is there a chance that Bitcoin and other altcoins could see a rebound after the recent chaos? Let’s look at the charts of top 5 cryptocurrencies that could outperform if there is a relief rally.
Bitcoin fell below the $39600 mark to $37332. The support zone was reached on Jan. 21. This indicates panic selling. Jan. 22 saw more selling and the price fell to $34,008.
Daily chart of BTC/USDT Source: TradingView
The relative strength index (RSI), which has fallen sharply in recent days, is now nearing the 20 level. This suggests that selling may have been excessive in the short-term. These levels of oversold are usually followed by a consolidation rally or relief rally.
The overhead zone is likely to be a strong barrier to recovery efforts. If the resistance zone of $37,332-$39,600 turns into resistance, it will indicate that sentiment is negative and traders are selling rallies.
The bears will attempt to re-establish the downtrend and bring the BTC/USDT pair below $30,000. The first sign that bears are losing their grip is a break or close to the 20-day exponentially moving average ($41.427)
BTC/USDT 4-hour chart. TradingView
The 4-hour chart clearly shows that the pair trades within a channel pattern. Although the bears managed to pull the price down below the channel, they were unable to maintain the lower levels. This indicates that bulls have been buying heavily and pushing the price back towards the channel.
The price could reach the 20-EMA, where bears could again present a challenge. The selling could get more intense if the price falls below the resistance line and drops below $34,008 A break above the 20EMA could lead to a rise in resistance.
Terra’s LUNA token trades in a descending channel over the past few days. The channel support line was reached on Jan. 22, but the price fell below it. However, the bulls bought this dip aggressively, as shown by the long tail of the day’s candlestick.
Daily chart of LUNA/USDT Source: TradingView
The LUNA/USDT currency pair may attempt a pullback towards the channel’s moving averages, then the downtrend line. The pair could reach $87.90 if bulls push the price higher than the channel. Later, it could rise to $93.81.
Contrary to popular belief, a decline in the price from the current level and the moving averages will indicate that bears are selling every minor rally. The support line could be retested by the pair. Selling could be accelerated if the support line is broken below.
LUNA/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that relief rallies have reached the 20EMA, which is an important level to be on the lookout for. Bears have a slight advantage because of the marginally downward-sloping 20EMA and RSI below the midpoint.
The pair may attempt to rally towards the channel’s downtrend line if bulls push the price higher than the 20-EMA. If the price falls below the 20-EMA, bears could take advantage of their chances to pull the pair towards the channel’s support line.
Cosmos (ATOM), which had been at 40 on Jan. 17, fell to the simple moving average of $27.57 on Jan. 22.
Daily chart ATOM/USDT Source: TradingView
The ATOM/USDT price pair has seen a sharp rebound from the 200-day SMA. This suggests that bulls are aggressively defending this level. The buyers will attempt to push the price up to the 20-day EMA ($35.91).
If the close is above this level, it could signal that the correction has ended. The pair could rally to $44.80 overhead resistance.
If the price falls below the 200-day SMA or at the current level, this positive outlook will be invalidated. This could lead to a drop of up to $20.
ATOM/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows a double-top formation. It was completed on a break below $34. The target objective for this topping pattern is $23.20. The pair fell to $27.31 intraday.
The breakdown level at $34 is a strong resistance to the relief rally at lower levels. The pair could reach the downtrend line if bulls continue pushing the price higher than this resistance. If the price breaks or closes above this line, it could signal a change in trend.
Related: How do you pick and analyze altcoins.
Alchemy Pay (ACH), a crypto-fiat payment system, aims to bridge the gap by enabling seamless transactions between both the fiat and crypto worlds. The recent partnership with MEXC Global will offer users a variety of payment options in Japan and Korea.
Algorand, Algorand, and Avalanche have also joined forces to offer direct fiat payment channels, such as Visa, Mastercard and PayPal, and a variety of local payment channels to their network.
Alchemy Pay will lower its costs by forming a partnership with NIUM in order to serve clients in more than 190 countries where NIUM is present. Alchemy Pay will benefit from NIUM’s licenses in economically important regions like the United Kingdom, Europe and Australia.
After a new collaboration between MakerDAO, the network announced support for Dai and a partnership agreement with IoTeX. This integration allows IOTX to be used in multiple parts of the globe for customer-to business (C2B), and business-to–business (B2B), payments.
Multiple partnerships have allowed the project to grow its support to more countries, with 300 payment channels reaching over 2 million merchants. Binance also added ACH to its exchange listing on January 10, making it easier and more convenient for traders to transact the currency.
Since August 2021, when it reached an all-time high, ACH has been in steady decline. This indicates that traders are making profits from rallies.
Daily chart ACH/USDT Source: TradingView
The ACH/USDT currency pair fell below the strong support zone of $0.056 to $0.045 Jan. 21. However, bears couldn’t capitalize on this advantage. This suggests that there is strong demand at lower levels.
The overhead zone is where buyers can push the price higher than the overhead zone. This could trap some aggressive bears that may have recently sold. A short squeeze could occur, which could push the pair towards the downtrend line in the descending triangle. Bullish momentum could increase on a break above the triangle.
However, if the price falls below the overhead zone it will indicate a shift in sentiment from sell on rallies to buy on dips. The bears will attempt to bring the price down below $0.03 and resume their downtrend.
Fantom (FTM), broke above the $3.17 overhead resistance Jan. 16, but couldn’t clear the next hurdle at the $3.48 level. This could have led to traders profit-booking, which may have caused a sharp pullback.
Daily chart FTM/USDT Source: TradingView
On Jan. 22, the bears brought the price down below the 50-day SMA ($2.14) but were unable to sink the FTM/USDT pair below the 200-day SMA (1.57) The bulls have been strong buyers and the pair has returned to the 50-day SMA.
Bulls will attempt to push the price higher than the 20-day EMA. The pair may retest the overhead area if they succeed.
If the price falls below the 20-day EMA or current level, this will indicate that traders are selling rallies. The bears will attempt to lower the pair below 200-day SMA.
FTM/USDT 4-hour chart. Source: TradingView
The chart below shows the formation of a head and shoulders pattern over 4 hours. It had a target price at $1.70. The pair has bounced back from $1.77, and is now at the 20-EMA. This resistance acts as a stiff stop.
The bears will attempt to resume the downtrend and sink $1.30 if the price drops below the current level. If the price rises above the 20EMA, the bears will attempt to halt the downtrend and sink the pair to $1.30.
UNUS SED LEO LEO (LEO), plunged below the ascending channel pattern Jan.21, but one minor positive is that bulls purchased at lower levels and are trying to push the price higher above the moving averages.
Daily chart LEO/USD TradingView
If they succeed, the LEO/USD pairing could test the overhead resistance at $3.92. If the pair breaks and closes above this level, it could signal the resumption or continuation of the uptrend. The channel’s resistance line could be reached and the pair could rise.
The pair could gain momentum if bulls push the price higher than the channel. If the price falls below $3.37, this positive outlook will be invalidated. The price could drop to the strong support of the 200-day SMA ($3.19).
LEO/USD 4-hour chart. TradingView
The 4-hour chart shows bulls failed to push the price higher than the overhead resistance of $3.85. Profit-booking may have led to a decline in the price above $3.85, which could have caused a drop to the support at $3.40.
The rapid rebound from $3.40 suggests aggressive buying at this level. Bulls will attempt to push the price up to $3.85. The uptrend may resume if bulls break the overhead zone of $3.85-3.922. If bulls break below $3.40, this positive view will be invalidated.
You should research all aspects of trading and investment before making any decision.
*Disclaimer – ACH is a featured cryptocurrency that Cointelegraph sponsors. Its inclusion did not impact this price analysis.
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.