Bitcoin (BTC) volatility has remained subdued over the last few days of last year, suggesting that investors are in no rush to enter the markets.
Bitcoin ended 2022 near $16,500 and failed to ignite the markets on the first day of the new year. This indicates that traders are cautious and looking for a catalyst to initiate the next trend move.
Several analysts remain bearish on Bitcoin’s near-term price action. David Marcus, CEO and founder of Bitcoin firm Lightspark, said in a December 30 blog post that he doesn’t see the crypto winter ending in 2023 or even 2024. He expects it will take time to restore consumer confidence, but believes the current reset could be good for legal firms in the long run.
Bearish calls are an indication that sentiment remains negative, but there is a silver lining to this. Usually, bear markets end after the last bull turns bearish. As there are no more sellers, price action stabilizes and new buyers enter the market. This usually causes a reversal and starts a new up move.
While Bitcoin remains in a range, select altcoins are showing signs of strength. Let’s look at the charts and note the important levels to watch out for.
BTC/USDT
The failure of the bulls to lift Bitcoin above the 20-day exponential moving average (EMA) of $16,778 has fueled the bears, who are trying to immediately push the price below the $16,256 level.
The 20-day EMA is gradually moving lower and the relative strength index (RSI) is near 43, indicating a slight advantage for sellers. If the bears break the price below $16,256, the BTC/Tether (USDT) pair may fall to $16,000 and further to the vital support level of $15,476. A break below this support could signal a resumption of the downtrend.
If buyers push the price above $17,100, this negative view will be invalidated in the near term. Such a move would indicate aggressive buying on the downside. The pair could then gather momentum and rise to $18,388. Sellers are again expected to mount a strong defense at this level.
The pair has been hovering between $16,256 and $17,061 for some time. A breakout from support faces selling near the moving averages. This suggests that bears continue to sell in rallies.
However, a small positive is that the bulls are not giving much ground and the pair remains near the 20-EMA. This increases the probability of a break above the moving averages. If this happens, the pair could rise to $16,800 and then to $17,061.
On the downside, bears will need to immediately pull the price below the $16,429 support to set up a retest of $16,256.
LTC/USDT
Several major cryptocurrencies are still searching for a bottom, but Litecoin (LTC) is well above its June low. This indicates strong demand at lower levels.
The 20-day EMA of $69 has flattened and the RSI is just above the midpoint, suggesting a balance between supply and demand.
If buyers push the price above the moving averages and hold it, the advantage will be in favor of the buyers. The LTC/USDT pair may then rise to the overhead resistance at the $75 level. This is an important level to watch in the near term, as a break above it could open the door for a rally to $85.
Conversely, if the price breaks below the current level and falls below the 20-day EMA, the pair may slide to $65.
On the 4-hour chart, the moving averages are slowly rising and the RSI is in positive territory, indicating bullish dominance. There is a small resistance at $72, but if this level is broken, the upside could reach $75.
Sellers will likely mount a strong defense in the $72-$75 zone, but if the bulls bulldoze their way through, the rally could accelerate and reach $80. On the downside, a break below $65 could open the doors for a move down to $61.
APE/USDT
ApeCoin (APE) has been trading in a large range between $3 and $7.80 for the past few months. The moving averages have flattened and the RSI is near the midpoint, indicating that selling pressure may be easing.
The bears did not allow the price to rise above the moving averages, but the encouraging sign is that the bulls maintained the buying pressure and did not allow the price to fall. This increases the probability of a break above the moving averages. If this happens, the APE/USDT pair could rise to $4.58 and then $5.25.
Alternatively, if the bears do not allow the price to break through the upper resistance, the pair may fall back to the vital support level of $3. A slide below the $3 to $2.61 support zone could signal the next leg down.
The pair formed a symmetrical triangle on the 4-hour chart. This indicates indecision between bulls and bears. While the moving averages are flat, the RSI has moved into the positive zone, indicating that the bulls have a slight edge. If buyers break through the minor barrier at $3.71, the pair may rise to the triangle resistance line.
Conversely, if the price breaks down and breaks below the uptrend line, it will indicate that the bears are back in play. The pair could then drop to $3.20 and further down to important support at $3.
Related: Rewind 2022: Cryptocurrency of the Year and Step into 2023
ICP/USDT
Internet Computer (ICP) continues to trade below the $4.61 breakout level, but the RSI is forming a positive divergence, indicating that selling pressure may be easing.
On December 30, buyers pushed the price above the downtrend line, but the bulls could not sustain the bounce. On January 1st, the bulls tried to break the barrier again, but the long wick on the candlestick shows that the bears are selling in intraday rallies.
If the price breaks below the 20-day EMA of $3.91 and holds, the bears will try to pull the price to $3.60 and then to $3.40.
Conversely, if the price breaks above the moving averages, the bulls will try to push the price above $4.21 again. If they can pull it off, the ICP/USDT pair could rise to $4.61, where the bears could try to stop the recovery.
The bulls were able to defend the 50-SMA but could not hold above the 20-EMA. This indicates that bears are more active. If the price breaks down and breaks below $3.90, the pair could fall to $3.76 and then $3.60.
Alternatively, if the bulls break through the upper resistance zone at $4.10 to $4.21, the momentum could rise and the pair could rise to $4.46. This level may behave like a small obstacle, but it will be overcome. Then the pair can reach $4.61.
BIT/USDT
BitDAO (BIT) has been consolidating between $0.25 and $0.35 for the past few days, but the price action is showing signs of a possible breakout.
The moving averages completed a bullish crossover, indicating a potential trend reversal. If buyers push the price above $0.35, the BIT/USDT pair could start a new uptrend. The pair can then try to rally towards the target price target of $0.45.
On the other hand, if the price breaks below $0.35, it will mean that the bears are actively defending this level. After that, the price may drop to the 20-day EMA at $0.30.
If the price breaks above this level, it will indicate that the sentiment has shifted from bearish to bearish in rallies. This could increase the prospects of a break above $0.35.
Bears will need to push the price below the moving averages to cancel the bullish view. The pair may then stay in range for a while longer.
The price has broken sharply below the upper resistance at $0.35, but the bulls are trying to stop the pullback at the 20-EMA. If the price barely bounces back from the 20-EMA, it will suggest aggressive buying on the downside. The pair could then extend the overhead resistance and begin its move north towards $0.40 and then $0.42.
Instead, a few short-term bulls can take profits if the price breaks down and breaks below the 20-EMA. This could pull the price up to the 50-SMA. Such a move would indicate that the pair could spend more time on the range.
This article does not contain investment advice or recommendations. Every investment and trading action involves risk and readers should do their own research before making a decision.