The crypto markets and the global equity markets staged a strong recovery on Nov. 29 in spite of the uncertainty from the newly discovered Omicron
The crypto markets and the global equity markets staged a strong recovery on Nov. 29 in spite of the uncertainty from the newly discovered Omicron variant of COVID-19.
Long-term investors seem to view the recent dip as a prime buying opportunity. A recent filing by MicroStrategy showed that the firm purchased 7,002 Bitcoin (BTC) at an average price of $59,187. That boosted MicroStrategy’s total stash to 121,044 Bitcoin, bought at an average price of about $29,534 per coin.
However, analytics resource Material Scientist, cited order book data, said “a lot of Bitcoin liquidity has been taken” and warned that “stop hunters” may attempt to shake out the weak hands with a fall.
Is the current recovery a bull trap or is it the start of a sustained relief rally? Let’s study the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin’s relief rally is facing resistance at the 20-day exponential moving average ($58,712). This suggests that sentiment remains negative and bears are attempting to sell on rallies to the overhead resistance level.
Although the 20-day EMA continues to slope down, the RSI has risen above 46, suggesting that the bearish momentum could be weakening.
The bulls will have to push and sustain the price above the 50-day simple moving average ($60,805) to signal that the corrective phase may be over. The rally could then challenge the overhead resistance zone at $67,000 to $69,000.
On the other hand, if the price sharply turns down from the 20-day EMA, the bears will attempt to break the strong support at the 100-day SMA ($54,184). If that happens, the BTC/USDT pair could slump to the psychologically critical level at $50,000.
The bulls are expected to defend this level aggressively because a break below it could result in panic selling. The pair could then slide to the next important support at $40,000.
ETH/USDT
Ether (ETH) rebounded off the neckline of the developing head and shoulders (H&S) pattern on Nov. 28, suggesting that bulls are defending the level with all their might. Sustained buying has pushed the price above the 20-day EMA ($4,316) today.
A break and close above the overhead resistance at $4,551 will indicate that the correction may be over. The ETH/USDT pair could then rally to the all-time high at $4,868. A break above this level will invalidate the bearish setup and open the doors for a possible rally to $5,796.
Alternatively, if the price turns down from the current level and breaks below the 50-day SMA ($4,243), the bears will make one more attempt to sink the pair below the neckline. A close below this level will complete the bearish setup and start a down move.
The selling may accelerate below the 100-day SMA ($3,794). The pair could then start its journey toward the pattern target at $3,047.
BNB/USDT
The long tail on Binance Coin’s (BNB) Nov. 28 candlestick indicates that bulls are buying the dips below the 20-day EMA ($595). The bulls will now attempt to push the price to the overhead resistance zone at $669.30 to $691.80.
A break and close above $669.30 will complete an inverted H&S pattern. This bullish setup has a target objective at $828.60. The 20-day EMA is trying to turn up and the RSI is at 56, suggesting that bulls are attempting to gain the upper hand.
The first sign of weakness will be a break and close below the 20-day EMA. The bears will then try to sink and sustain the price below the 50-day SMA. Such a move could result in a decline to the strong support at $510.
SOL/USDT
Solana (SOL) once again dropped below the support line of the symmetrical triangle on Nov. 28 but the bears could not sustain the lower levels. This suggests aggressive buying on dips.
The SOL/USDT pair broke above the 50-day SMA ($204) today and the bulls will now try to surmount the barrier at the 20-day EMA ($212). If they succeed, the pair could rally to the resistance line where the bears may pose a stiff challenge.
A break and close above the resistance line will suggest that the correction may be over. The pair could then rally to $240 and later to $259.90.
On the contrary, if the price turns down from the 20-day EMA, the bears will again attempt to sink and sustain the pair below the support line. The selling could accelerate on a break and close below the 100-day SMA ($172).
ADA/USDT
Cardano (ADA) is in a downtrend. The price bounced off $1.41 on Nov. 28 but the bulls are struggling to sustain the higher levels.
The 20-day EMA ($1.78) continues to slope down and the RSI is near the oversold zone, indicating that bears are in control. If the price turns down from the current level, the bears will attempt to sink the ADA/USDT pair below $1.40.
If they succeed, the downtrend could resume with the next target objective…
cointelegraph.com