After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and a
After nearly a 20% rally last week, Bitcoin (BTC) is on track to end this week with gains of roughly 10%. Bitcoin’s rally has improved sentiment and attracted buying in several altcoins. This sent the total crypto market capitalization firmly above the $1 trillion mark.
The strong recovery in Bitcoin has startled several analysts who remain skeptical about the rally. Some believe that the current rise is a dead cat bounce that will reverse direction sharply while others see similarities between the current rally and the 2018 bear market recovery.
Although traders should be ready for any eventuality, the pace of the rise in Bitcoin does point to a possible major bottom. There are likely to be bumps down the road but the dips are likely to be aggressively purchased by traders.
Bitcoin’s sustained recovery may encourage buying in select altcoins.
Let’s study the charts of Bitcoin and select altcoins that are showing strength in the near term.
BTC/USDT
Bitcoin climbed above the $21,650 overhead resistance on Jan. 20, indicating the resumption of the up-move. This shows that demand remains strong at higher levels.
The bulls pushed the price above the $22,800 resistance on Jan. 21 but failed to build upon the breakout as seen from the long wick on the day’s candlestick.
While the upsloping moving averages indicate that bulls are in command, the relative strength index (RSI) in the overbought territory warrants caution. It suggests that a few days of consolidation or minor correction is possible.
However, when a new uptrend starts, the RSI sometimes tends to remain in the overbought zone and frustrates the bears. If that happens, the uptrend may 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 rebounds off this level, it will suggest that the bulls are buying on every minor dip. That could increase the likelihood of a 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 higher and soars above $23,271, the bullish momentum could pick up and the pair may rush toward $25,211.
If the price turns down and breaks below $22,600, the pair could slide to the 20-exponential moving average. This level may act as a support but if bears manage to pull the price below it, the next stop could be $21,480.
APE/USDT
ApeCoin (APE) has been range-bound between $7.80 and $3 for the past several months. After the bears failed to sink the price below the range, the bulls are attempting a comeback. They will try to propel the price to the resistance of the range.
The upsloping moving averages and the RSI in the overbought area suggest that buyers have the upper hand. There is a minor resistance near $6.40 but if buyers bulldoze their way through it, the APE/USDT pair could surge to $7.80. This level may witness aggressive selling by the bears.
The positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA ($4.80). That could sink the price to the 50-day simple moving average ($4.17).
The 4-hour chart shows that the pair is in a strong uptrend. The bears are trying to stall the up-move at $6 but a positive sign is that the bulls have not given up much ground. This indicates that every minor dip is being purchased. The bulls will now try to propel the price above $6 and resume the uptrend.
On the contrary, the bears will try to pull the price below the 20-EMA. If they succeed, the pair could attract profit-booking from the short-term bulls. The pair could then tumble to $5.
MANA/USDT
Decentraland (MANA) rallied sharply from $0.28 on Dec. 30 to $0.78 on Jan. 21, which shows strong momentum in favor of the bulls.
The bears sold the break above $0.74 on Jan. 17 but the bulls stepped in and bought the dip at $0.61. This shows that the sentiment remains positive and traders are viewing the dips as a buying opportunity.
The bulls will have to sustain the price above $0.74 to signal the start of the next leg of the recovery. The MANA/USDT pair could surge to $0.87 and thereafter to the psychological barrier at $1.
If bears want to gain the upper hand, they will have to sink the price below $0.61. If they do that, the pair could start a deeper correction to $0.53.
The 4-hour chart shows the formation of an inverse head and shoulders pattern. If buyers thrust the price above the neckline of the pattern, the setup will complete and the pair could spurt toward the target objective at $0.93.
Contrarily, if the price turns down from the current level and breaks below the moving averages, it will suggest that the bears are fiercely guarding the $0.74 resistance. The…
cointelegraph.com