Bitcoin (BTC) has been trading in a tight range since Thanksgiving, November 24, as traders are uncertain about the next directional move. As a rule, in a bear market, analysts become bullish and project targets, which tend to scare away investors.
Bitcoin’s failure to mount a strong recovery led to several downside targets extending to $6,000.
While anything is possible in a bear market, traders with a long-term view can try to pick up reasonably strong coins in several tranches. Because a bottom will only be confirmed in hindsight, and trying to time it is usually a futile exercise.
In a bear market, not all coins go down at the same time. So, in addition to keeping an eye on the broader cryptocurrency market, traders should keep a close eye on the coins of their choice.
Cryptocurrencies that lead the market out of a bear phase generally tend to do well when the next bull market begins. Let’s look at the charts of cryptocurrencies that are trying to start an uptrend in the short term.
BTC/USDT
Bitcoin has been consolidating between $15,588 and $17,622 over the past few days. The relative strength index (RSI) has formed a bullish divergence, suggesting that selling pressure may ease.
A relief rally may face stiff resistance in the zone between the 20-day exponential moving average ($17,065) and $17,622. If the price breaks below the upper zone, the BTC/USDT pair may extend its stay in the range for a while longer.
If buyers push the price above the upper zone, it will indicate that the downtrend may be coming to an end. The 50-day simple moving average ($18,600) may act as a minor barrier, but if breached, an upward move could reach the psychological level of $20,000.
Alternatively, if the price breaks below the upper resistance and breaks below $15,588, this could signal a resumption of the downtrend. The pair could then drop to $13,554.
On the 4-hour chart, the moving averages have flattened out and the RSI is near the midpoint, indicating a balance between supply and demand. If this balance pushes the price above $17,000, it could tilt in favor of the bulls. The pair could then rise to the upper resistance at $17,622.
Instead, if the price breaks below $16,000, the pair may fall into the critical support zone between $15,588 and $15,476. A break below this zone could accelerate selling and start the next phase of the downtrend.
DOGE/USDT
Dogecoin (DOGE) broke above the top resistance at $0.09 on November 25th, but the bears pulled the price back below the level on November 26th. Buyers regrouped and pushed the price above the $0.10 38.2% Fibonacci retracement level on November 27.
Bears may again try to stop the recovery near $0.10, but if the bulls do not allow the price to fall below $0.09, the DOGE/USDT pair may gather momentum and move higher towards the 61.8% Fibonacci retracement level of $0.12. If this level also scales, the pair may continue its uptrend towards $0.16.
On the other hand, if the price breaks below the current level, it will suggest that bears continue to view rallies as selling opportunities. The pair may then drop as low as $0.09. If this support gives way, the 50-day SMA ($0.08) could be challenged.
Buyers pushed the price above the range, which indicates the beginning of an uptrend. The strong rally has pushed the RSI into deeply overbought levels and suggests a minor correction or consolidation in the near term.
If the price breaks below the 38.2% Fibonacci retracement of $0.10, but bounces back from the breakout level, this indicates that sentiment has turned positive and traders are buying on the downside. Bulls will then try to continue the uptrend. The breakout target is $0.12.
This bullish outlook may be invalidated in the near term if the price breaks down and re-enters the range. The pair may then fall to the 50-SMA.
LTC/USDT
Litecoin’s (LTC) break above the resistance above $75 is the first indication of a potential trend reversal. Bears tried to push the price below $75 and trap aggressive bulls, but buyers held their positions.
The bulls will try to push the price above the resistance above $84. If they succeed, it could be the start of a new uptrend. A rising 20-day EMA ($67) and an RSI close to the overbought zone indicate that the path of least resistance is to the upside. The LTC/USDT pair may then rise towards the target target of $104.
Conversely, if the price falls below $84, the pair may fall into the $73 to $75 support zone. If this zone is breached, the pair may slide to the 20-day EMA. Bears will need to pull price below this support to trap aggressive bulls.
If the price breaks back from the 20-day EMA, the bulls will again try to push the pair above $84 and start an uptrend.
The 4-hour chart shows that the price broke below the 20-EMA and closed, but the bears failed to build on this advantage. The bulls bought this dip and pushed the price above the 20-EMA. Both moving averages are rising and the RSI is slightly above the midpoint, indicating that buyers have a slight edge.
There is a small resistance at $80, but if the bulls push the price above this level, the pair could rise to $84. The pair can then try to rise to $96. If the bears want to invalidate this view in the short term, they will need to pull the pair below $73.
Related: Bitcoin mining revenue is the lowest level of the last two years, the decrease in hash rate
LINK/USDT
Chainlink (LINK) has been in a range between $5.50 and $9.50 for the past few weeks. A strong bounce above the $5.50 support on November 21 suggests bulls are aggressively buying dips to this level.
The 20-day EMA ($6.74) has started to rise and the RSI has moved into positive territory, indicating a slight advantage for the bulls. If the price breaks above the 50-day SMA ($7.15), a rally to $8.50 and then $9.50 is more likely.
Contrary to this hypothesis, if the price breaks down and breaks below the 20-day EMA, it will indicate that the bears are active at higher levels. The LINK/USDT pair may then fall back towards the support at $5.50 and consolidate near it for a few more days.
A strong bounce from the $5.50 level is approaching overhead resistance at the $7.50 level. If the price breaks below this level and falls below the 20-EMA, the pair may fall to the 50-SMA. A break below this support could see the pair remain between $5.50 and $7.50 for a while.
Another possibility is that the price breaks below $7.50 but rises back from the 20-EMA. The bulls will then look to push the price above $7.50 and move north towards $8.50.
APE/USDT
ApeCoin (APE) has been consolidating in a wide range between $3 and $7.80 for the past few months. The bears tried to push the price below the support of the range, but could not hold the lower levels. This indicates strong demand at lower levels.
The sustained buy price pushed above the 20-day EMA ($3.47) on November 26, indicating that the bulls are back. There is a minor resistance at the 50-day SMA ($4.06), but if the bulls clear this barrier, the APE/USDT pair may rise to a bearish trendline.
If the price breaks below the lower trend line, the pair may descend to the 20-day EMA. If the pair bounces back from this level, it will indicate that sentiment has shifted from selling to bearish in rallies. This could improve the prospects of a break above the lower trendline. The pair can then go up to $6.
Conversely, if the price breaks below the downtrend line and falls below the 20-day EMA, the pair can slide back to strong support at $3.
On the 4-hour chart, the moving averages have started to rise and the RSI has jumped into overbought territory, indicating that the bulls have a slight edge. The recovery may face resistance at $4, but if the bulls do not allow the price to fall below the moving averages, the upside may reach the bearish line.
If the price breaks down and breaks below the 50-SMA, this bullish sentiment may be invalidated in the near term. Such a move would suggest bears continue to sell in rallies. The pair can then drop to $3.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risk, you should do your own research when making a decision.