Bitcoin (BTC) has stopped its decline and is attempting a recovery along with select altcoins. Some traders have been fearing a massive sell-off in Bitcoin but Capriole CEO Charles Edwards said that Bitcoin’s worst crashes have happened “due to miner capitulation (December 2018 and March 2020), when BTC fell below production costs.” However, the current production cost of Bitcoin was $34,000, which is well below the current price.
In a sign that institutional investors remain bullish on the crypto sector even after the recent fall, Cathie Wood’s Ark Invest bought 6.93 million shares of the special purchase acquisition company that will merge with Circle, the principal operator of USD Coin (USDC) and the second-largest stablecoin in terms of market capitalization.
Could Bitcoin continue its recovery and pull select altcoins higher? Let’s study the charts of the top-5 cryptocurrencies to find out.
BTC/USDT
The bulls are struggling to propel Bitcoin above the 20-day exponential moving average ($44,415) for the past few days but a minor positive is that buyers have not given up much ground. This suggests that bulls are buying on every minor dip.
Contrary to this assumption, if the price fails to rise above the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on rallies. The bears will then attempt to sink the price below the critical support at $39,600. If they succeed, the pair could extend its downtrend.
A break and close above $45,456 could tilt the advantage in favor of the bulls, signaling the start of a possible rally to $52,088. Alternatively, a break and close below $39,600 could indicate the resumption of the downtrend.
NEAR/USDT
NEAR Protocol’s NEAR token is in a strong uptrend. The price broke above the previous all-time high at $17.95 on Jan. 11, signaling the resumption of the up-move. The bears pulled the price back below $17.95 on Jan. 12 but the bulls bought this dip and reclaimed the level on Jan. 13.
Alternatively, if bears pull the price below $17.95, the pair could drop to the 20-day EMA ($16.42). A bounce off this level could keep the uptrend intact but a break and close below it will suggest that traders are rushing to the exit. The pair could then decline to $13.
If bulls propel the price above $20.59, the uptrend could begin. The pair could then rise to $22 and later to $25.
Contrary to this assumption, if the price drops below the 20-EMA, it will indicate that short-term traders may be booking profits. The pair could then drop to the 50-SMA. A break and close below this support will indicate the start of a deeper correction.
ATOM/USDT
Cosmos (ATOM) is attempting to form an inverse head and shoulders pattern, which will complete on a breakout and close above the overhead resistance at $44.80.
Alternatively, if the price turns down from the overhead resistance, the ATOM/USDT pair could drop to the 20-day EMA ($36). This is a key level for the bulls to defend. If the price rebounds off this level, the bulls will again attempt to drive the pair above the overhead resistance and resume the uptrend.
A break and close below the 20-day EMA will be the first sign that the up-move could be losing steam. The pair could then drop to $32.90.
Alternatively, if the bears successfully defend the resistance at $44.80, the pair could drop to the 20-EMA. If the price rebounds off this support, the bulls will again try to clear the overhead hurdle. This positive view will be negated on a break and close below the 50-SMA.
Related: Dogecoin leaps 25% after Musk announces DOGE payments for Tesla merch
FTM/USDT
Fantom (FTM) is in a strong uptrend. The price action of the past few days has formed an inverse (IH&S) which will complete on a break and close above $3.17.
Contrary to this assumption, if the price turns down from the overhead resistance, the bears will attempt to pull the FTM/USDT pair to the 20-day EMA ($2.62). If the price turns up from this level, it will suggest that the sentiment remains positive and traders are buying the dips.
However, a break and close below this support will signal the start of a deeper correction to the 50-day SMA ($2.07).
On the other hand, if bears pull the price below $3.17, the pair could drop to the 20-EMA. This is an important level to watch out for because a break and close below it could indicate that the current breakout may have been a bull trap. The pair could then drop to $2.80 and later to the 50-SMA.
FTT/USDT
FTX Token (FTT) has been in a strong corrective phase for the past several weeks. The bulls pushed the price above the downtrend line on Jan. 14, signaling a possible change in trend.
Contrary to this assumption, if the price turns down from the current level and breaks below the moving averages, it will suggest that the breakout was a bull trap. That could pull the price down to $33.76. A break and close below this support could open the doors for a possible drop to $24.
Both moving averages are sloping up and the RSI is in the overbought zone, indicating that bulls have the upper hand. If bulls maintain the price above $45.07, the pair could start its march toward the psychological resistance at $50.
This positive view will invalidate if the price turns down and re-enters the wedge. Such a move will indicate that demand dries up at higher levels.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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