Bitcoin and altcoins are showing signs of short-term exhaustion, meaning a few days of consolidation could occur.
Morgan Creek Digital co-founder Anthony Pompliano highlighted data from Santiment, which showed that the 30-day rolling correlation between Bitcoin (BTC) and the S&P 500 is 0. Pomp stressed that the lack of correlation shows that Bitcoin is a store of value.
Along with that, Bitcoin has also outperformed most traditional asset classes such as gold, the S&P 500, crude oil, and the U.S. dollar since the sector wide crash that took place in March when coronavirus fears reached a peak.
Abra Co-founder and CEO Bill Barhydt recently said that “Bitcoin is the single best investment opportunity in the world right now” and he has substantially increased his Bitcoin holdings in the past few days. After the recent purchase, about 50% of Barhydt’s total investment portfolio is now held in Bitcoin.
Is Bitcoin likely to resume its uptrend or will it take a pause and consolidate for a few days before starting the next trending move? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
The bulls are struggling to propel Bitcoin (BTC) above the $13,200–$13,343.66 resistance zone. This suggests that after the initial frenzy, buying has dried up at higher levels.
The failure to sustain above $13,200 could attract profit booking by the short-term traders that may result in a pullback to the $12,460–$12,050 support zone.
However, the upsloping moving averages and the relative strength index in the overbought territory, shows that the bulls are in command. Therefore, the bulls might buy the dip to the 20-day exponential moving average ($12,034).
If the BTC/USD pair rebounds sharply from the 20-day EMA, the bulls will make one more attempt to resume the uptrend. If they succeed, a rally to $14,000 is likely.
Conversely, if the bears can sink the pair below the 20-day EMA, a fall to the 50-day simple moving average ($11,109) is possible.
The tight range consolidation of the past three days has resolved the downside. The bears have dragged Ether (ETH) back below $395 but the bulls are attempting to keep the price above the 20-day EMA ($383).
If the ETH/USD pair rebounds off the 20-day EMA and rises above $400, it will suggest strong accumulation at lower levels. A breakout of $420 will signal the possible resumption of the uptrend.
However, the 20-day EMA is flattening out and the RSI is just above the midpoint, which suggests a balance between supply and demand.
If the bears sink the price below the 20-day EMA, it will suggest that the momentum has weakened. A break below the uptrend line may intensify the selling.
The failure of the bulls to push XRP above the $0.26 resistance in the past few days may have attracted profit booking by the short-term traders. The altcoin has broken below the 20-day EMA ($0.249) and is currently attempting to stay above the 50-day SMA ($0.244).
If the XRP/USD pair rebounds off the 50-day SMA, the bulls will make one more attempt to push the price above $0.26. If they can pull it off, the pair is likely to pick up momentum and rally to $0.30.
On the other hand, if the bears sink the price below the 50-day SMA, the pair could extend its stay inside the $0.2295–$0.26 range for a few more days.
The flattening moving averages and the RSI just below 50 also point to a possible range-bound action in the short-term.
The failure of the bulls to propel Bitcoin Cash (BCH) above the $280 resistance attracted profit booking by the short-term traders. This selling has dragged the price down to the 20-day EMA ($252).
If the BCH/USD pair rebounds sharply from the 20-day EMA, it will suggest accumulation at lower levels. The bulls will then again try to push the price above the overhead resistance at $280.
If they succeed, the rally may extend to $300 and above it to $326.30. Conversely, if bears sink the price below the 20-day EMA, the BCH/USD pair could drop to $242. Such a move will suggest that the pair could remain range-bound for a few more days.
The RSI has formed a negative divergence, which suggests that the bullish momentum may be weakening.
Chainlink (LINK) has turned down from close to $13 levels and the bears will now attempt to pull the price back below the $11.8028–$11.1990 support zone. If they succeed, it will suggest that the recent breakout of $11.8028 was a bull trap.
A break below the moving averages could signal further weakness and the trend will turn in favor of the bears if the uptrend line also fails to provide support.
On the other hand, if the LINK/USD pair rebounds off the $11.8028-$11.1990 support, it will suggest that the bulls are buying the dips. The bulls will then make one more attempt to propel the pair above $13.28.
If they succeed, the uptrend is likely to pick up momentum with a rally to $15 and then to $17.
Binance Coin (BNB) remains in an uptrend and the bulls have held the support at $29.5646 for the past four days. The upsloping moving averages and the RSI above 57 signals that bulls are in command.
If the bulls can thrust the BNB/USD pair above the $32–$33.3888 resistance zone, the uptrend may pick up momentum. A breakout of the resistance zone increases the possibility of a retest of the all-time highs.
Contrary to this assumption, the first sign of weakness will be a break below the 20-day EMA ($29.68) and the pair could signal a deeper correction if it sustains below the 50-day SMA ($27.91).
Polkadot (DOT) broke above the neckline of the inverse head and shoulders pattern on Oct. 24. This bullish setup has a target objective of $5.40. The bulls are currently attempting to push and sustain the price above the overhead resistance at $4.6112.
If the buyers can manage to sustain the price above $4.6112, the momentum is likely to pick up. The 20-day EMA ($4.22) has flattened out and the RSI has risen above 59, which suggests that the selling pressure has reduced.
This positive view will be invalidated if the DOT/USD pair turns around from the current levels and plummets below the moving averages. Such a move will suggest that the break above the neckline was a bull trap.
Litecoin (LTC) turned around from the $60 mark as traders booked profits following the sharp gains of the past few days. The upsloping moving averages and the RSI above 62 suggest that bulls have the upper hand.
The LTC/USD pair has corrected to the 38.2% Fibonacci retracement level of $54.9361 and if this support cracks, a drop to the 50% retracement level of $53.3915 is likely.
If the pair bounces from either level, it will suggest buying on dips. In such a case, the bulls will again try to resume the up-move by driving the price above $60. If they succeed, the pair could rally to $64 and then to $68.9008.
This bullish view will be invalidated if the bears sink the pair below the breakout zone of $51–$52.36.
Bitcoin SV (BSV) broke above the symmetrical triangle on Oct. 24 but the bulls could not build up on the strength and push the price above the overhead resistance at $180.63.
This has resulted in profit booking that has dragged the price close to the 20-day EMA ($167). A break below the moving averages could pull the price down to the uptrend line of the triangle.
On the contrary, if the BSV/USD pair rebounds off the 20-day EMA, the bulls will make one more attempt to push the price above $180.63. If they are successful, a rally to $208 and then to $227 is possible.
Cardano (ADA) has broken down of the support line of the rising wedge pattern and the 20-day EMA ($0.10). The bulls are currently attempting to defend the support at the 50-day SMA ($0.099).
If the ADA/USD pair rebounds off the current levels, the bulls will make one more attempt to drive the price above $0.1142241.
Conversely, if the bears sink the price below the 50-day SMA, a drop to $0.90 and then to $0.755701 is possible.
The flat moving averages and the RSI just below 45 suggest that bears have a minor advantage.
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.
Market data is provided by HitBTC exchange.
Leave a Reply