Bitcoin (BTC) has finally breached the $17,000 mark after reaching $17,375 on January 12. Both bulls and bears are eyeing the Consumer Price Index (CPI) due on January 12th. If the print shows that inflation is cooling. , riskier assets may rise, but a negative surprise may attract strong selling.
While some believe a macro bottom may be forming in Bitcoin, others are skeptical. They draw parallels between the current bear market and the bursting of the dot-com bubble. The United States Federal Reserve stopped raising rates in May 2000, but the Nasdaq did not fall for another two years. If the same scenario plays out in cryptocurrencies, then the next bull run may not start in a hurry.
However, one positive for the future of the cryptocurrency industry is that legacy financial companies continue to show interest in the space. Jez Mohideen, co-founder and CEO of Laser Digital, believes that the arrival of traditional companies can help regulate the cryptocurrency sector.
Are Charts Pointing To A Rally In Bitcoin? What other altcoins are showing a positive chart structure? Let’s find out.
BTC/USDT
Bitcoin has been trading above its moving averages since January 4th. This is the first indication that selling pressure may be easing. The price reached the upper resistance at $17,061 on January 6, but the bulls failed to break above that level. This shows that the bears have not given up yet.
A small positive point in favor of the bulls is that they did not allow the BTC/USDT pair to fall below the moving averages. If the price consolidates between the moving averages and $17,061 for a while, the prospects for a break above the overhead resistance may improve. If the bulls push the price above $17,061, the pair could rise to $18,388.
Alternatively, if the price breaks down and breaks below the moving averages, it would indicate that the pair could be stuck between $17,061 and $16,256 for a few more days.
The 4-hour chart shows that the bears are holding the $17,061 level, but they have not been able to pull the price below the 20 exponential moving average. This suggests that buyers are in no rush to exit as they are waiting for a break above the upper resistance.
A gradually rising 20-EMA and relative strength index (RSI) in positive territory suggest that buyers have a slight edge. A break above $17,061 could signal the start of a new uptrend in the near term.
If the bears want to regain control, the price will have to drop below the 50 simple moving average. The pair could then fall back to $16,600 and remain in the range for some time longer.
SOL/USDT
Solana (SOL) has underperformed over the past few months, but the price action over the past few days raises the possibility of a possible support rally. It is too early to predict whether the expected move is a dead cat bounce or the start of a sustained recovery. However, the setup can be interesting for short-term traders.
The SOL/USDT pair rallied sharply from the December 29 low of $8. Buyers pushed the price above the 50-day SMA ($12.75) on January 3 and have been able to hold the pair above that level since then. This indicates that the bulls are trying to turn the moving averages into support.
If the price breaks the resistance above $15, the pair may accelerate towards $19. This level may again act as a barrier, but if crossed, the rally may extend to the 50% Fibonacci retracement level at $23.40.
If the price falls below the moving averages, the bulls may lose their grip. Such a move would indicate that the bears are active at a higher level.
The 4-hour chart shows that the price has pulled back to the 20-EMA, but the bulls are buying this dip. This indicates a shift in sentiment from selling to bearish in the rallies. The bulls will look to extend the upside by pushing the price above the $14.24 to $15 resistance zone.
On the other hand, bears will try to pull the price below the 20-EMA. If they can pull it out, the pair could fall to the 50-SMA. This level can act as a support, but if the bears break the price below it, the decline can be extended to $11.
XMR/USDT
Monero (XMR) broke out of a falling wedge pattern on January 5th, and buyers managed to hold the price above the breakout level for three days. This indicates a potential trend reversal.
The moving averages are up and the RSI is in positive territory, indicating that buyers have an advantage. There is minor resistance at $162 and then again at $167, but both levels are likely to be broken.
The XMR/USDT pair may then reach the overhead resistance at $174. This level could act as a major hurdle, but if the bulls can overcome it, the pair could rise to $200.
Contrary to this hypothesis, if the price breaks down and breaks below the moving averages, it will indicate that the breakout of the wedge may be a bull trap. Downward momentum may strengthen with a break below $138.
The 4-hour chart shows that the bears are trying to form a short-term double top pattern near $160. Sellers have pulled the price below the 20-EMA, which opens the door for a possible drop to the 50-SMA. Bulls can fiercely defend moving averages, as a break below it can tip the advantage in favor of the bears.
If the price rises from the current level, it will indicate that the lower levels are attracting buyers. The pair may then rise again to the resistance above $160. If this resistance is scaled, the upward move may continue.
Related: Digital Currency Group Under Investigation by US Authorities: Report
LDO/USDT
Lido DAO (LDO) broke out of the lower trend line on January 1 and made a sharp move higher. This indicates the end of the downtrend.
The moving averages have completed a bullish crossover, indicating that buyers are dominant, but an overbought level on the RSI is signaling a short-term correction or consolidation.
The LDO/USDT pair may reach the overhead resistance at $1.85 if buyers do not divest many positions from the current level. This level could still act as a strong barrier, but if the bulls overcome it, the pair could reach $2.30.
The first sign of weakness will be a break below the 20-day EMA ($1.21). Such a move would indicate that bears are selling in rallies.
The 4-hour chart shows that the pair has started an uptrend. Rising moving averages and an overbought RSI indicate that the bulls remain in control. There is a small resistance at $1.71, but if this is broken, the rally could reach $1.85.
The 20-EMA acted as strong support during the pullback, so it remains an important level to watch in the near term. If this support is cracked, the pair may slide to the 50-SMA.
AAVE/USDT
Buyers have successfully defended psychological support near $50 and are trying to form a double bottom pattern. This is why Aave (AAVE) was chosen.
A breakout of strong support at $50 reached the 50-day SMA ($58). Both moving averages have flattened and the RSI has jumped into positive territory, indicating an advantage for buyers.
If the bulls push the price above the 50-day SMA, the AAVE/USDT pair may rise to the lower trendline and then to $67. A break and close above this level would complete a double bottom with a pattern target of $84.
This bullish view will be invalidated if the price breaks down and breaks below the vital support at $50.
The bulls are trying to push the price above the immediate upper resistance near $58 and hold. If they manage to do so, the pair may approach a bearish trend line. This level could act as a strong barrier, but if the bulls on the way down turn the $58 level into support, it could increase the likelihood of a break above the downtrend line.
The first support to watch on the downside is the 20-EMA. If this level gives way, the pair can fall to $54. This is an important level for the bulls to defend if they want to keep the short-term momentum in their favor.
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