After rallying nearly 20 percent last week, Bitcoin (BTC) ended this week with an increase of about 10%. Bitcoin’s rally has boosted sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.
Bitcoin’s strong recovery has surprised many analysts who are skeptical of the rally. Some believe that The current addition is a dead cat bounce That would quickly reverse direction while others see similarities between the current rally and the rally. 2018 Bear Market Recovery.
While traders should be prepared for any eventuality, Bitcoin’s upward momentum points to a possible major downside. A bump down the road is likely but dips are likely to be aggressively bought by traders.
Bitcoin’s continued recovery could encourage buying into select altcoins.
Let’s study Bitcoin charts and pick altcoins that are showing strength in the near term.
Bitcoin climbed above the $21,650 overhead resistance on January 20, indicating the resumption of an upward move. This indicates that demand remains strong at high levels.
The bulls pushed the price above the $22,800 resistance on January 21 but failed to make a breakout as seen by the long vac on the day’s candlestick.
While higher-sloping moving averages suggest bulls are in command, the Relative Strength Index (RSI) in overbought territory warrants caution. This suggests that a few days of stabilization or minor correction is possible.
However, when a new uptrend begins, the RSI sometimes stays in the overbought zone and disappoints the bears. If this happens, the uptrend could continue without a major pullback and the pair could reach $25,211.
On the downside, the first support is at $21,480. If the price returns to this level, it would suggest that the bulls are buying on every minor dip. This could lead to a potential rally to $25,211.
The 4-hour chart shows that the bulls are trying to flip the $22,800 level into support. If the price continues and moves above $23,271, the bullish momentum may increase and the pair may move towards $25,211.
If the price declines and breaks below $22,600, the pair may slide to the 20-exponential moving average. This level could act as a support but if the bears manage to take the price below it, the next stop could be $21,480.
ApeCoin (monkey) has been in a range between $7.80 and $3 for the past several months. After failing to sink the bear price below the threshold, the bulls are trying to make a comeback. They will try to push the price above the resistance of the range.
A higher sloping moving average and RSI in the overbought area indicate that buyers have the upper hand. There is a minor resistance near $6.40, but if buyers break through it, the APE/USDT pair could rise to $7.80. This level may witness aggressive selling by bears.
If the price breaks below the 20-day EMA ($4.80) then the positive outlook may be invalidated in the near term. This could push the price down to the 50-day simple moving average ($4.17).
The 4-hour chart shows that the pair is in a strong uptrend. Bears are trying to stop an upward move at $6 but a positive sign is that the bulls haven’t given up much ground. This shows that every minor dip is being bought. The bulls will now look to take the price above $6 and resume the uptrend.
Conversely, bears will try to push the price below the 20-EMA. If they succeed, the pair could attract profit booking from short-term bulls. The pair can then drop to $5.
Decentralized (Mana) rose sharply from $0.28 on December 30 to $0.78 on January 21, indicating strong momentum in favor of the bulls.
Bears sold a break above $0.74 on January 17, but bulls stepped in and bought the dip at $0.61. This indicates that sentiment remains positive and traders are viewing the decline as a buying opportunity.
Bulls need to hold above $0.74 to signal the start of the next phase of recovery. The MANA/USDT pair may rise to $0.87 and then hit a psychological barrier at $1.
If the bears want to gain the upper hand, they will have to sink the price below $0.61. If they do, the pair could start a deep correction to $0.53.
The 4-hour chart shows the formation of an inverse head and shoulders pattern. If the buyers push the price above the neckline of the pattern, the setup will be complete and the pair can move towards the target objective at $0.93.
Conversely, if the price breaks below the current level and breaks below the moving average, it would suggest that the bears are fiercely protecting the $0.74 resistance. The pair may then sink into the $0.61 to $0.55 support zone.
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the ghost (GHOST) broke and closed above the downtrend line on January 17, indicating a possible trend reversal. The bears tried to take the price below the downtrend line on January 18, but the bulls held their ground.
The 20-day EMA ($74) and the RSI in overbought territory suggest that the bulls are in the lead. This gain could further strengthen with a break above $92. The AAVE/USDT pair could then reach the psychologically important $100 level.
This level may again pose a strong challenge for buyers but if they overcome this hurdle, the pair could move towards $115.
Contrary to this hypothesis, if the price breaks down and dips below the downtrend line, it will signal that the bears are moving higher. Gains may tilt in favor of the bears on a slide below the 20-day EMA.
The 4-hour chart shows that the bears are defending the zone between $88 and $91 but have not been able to pull the price below the moving average. This indicates bullish sentiment where traders are buying dips.
Bell would make another attempt to clear the overhead zone. If they can remove it, the pair can resume the uptrend.
Instead, if the bulls fail to push the price above $91, the bears will try to pull the pair below the moving average. The pair could then fall to $78 and later to $73.
filecoin (FIL) broke above the downtrend line on January 14 and retested the breakout level on January 18.
The moving average has completed a bullish crossover and the RSI is in an overbought position, indicating that the bulls are in control. The FIL/USDT pair could reach $6.50 where the bears could defend strongly again. If the bulls kick the price above this level, an upside move could reach $9 with a short break near $7.
The 20-day EMA ($4.24) is an important support to watch on the downside as a break below it could tilt the gains in favor of the bears.
The bears tried to stop the support rally at $5, but the bulls broke through this resistance and started the next phase of the recovery. Higher slope moving averages and RSI in the overboot zone indicate bulls are firmly in the driver’s seat. Buyers will try to push the pair towards $6.50 and then $7.
On the downside, the 20-EMA is an important support to watch out for. If the price breaks away from this level, it will indicate that the uptrend is in place. On the other hand, if the bears drag the price below the moving average, the pair could fall to $4.20.
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