Bitcoin price looks slightly overextended in the short-term and may take a break while altcoins play catch-up.
The United States Federal Reserve Chair Jerome Powell recently said that additional fiscal stimulus could result in a stronger recovery. He also emphasized that the Fed had enough tools to support the economy.
After the winner of the U.S. election is announced, the focus of lawmakers could shift to the next stimulus package. However, additional money printing will only worsen the existing national debt which is currently at $27.2 trillion.
Even though a new round of stimulus measures may be required in the short-term to reduce the impact of the economic crisis caused by the COVID-19 pandemic, analysts believe that the Fed may not be able to roll back the measures in the future.
For this reason, apprehensive institutional investors have been hedging their portfolio with gold and a few others like billionaire hedge fund manager Paul Tudor Jones have advocated buying Bitcoin (BTC).
Galaxy Digital CEO and investor Mike Novogratz believes that Bitcoin is in a bull phase. Hence, he recently advised Bitcoin HODLers to sit on their hands and lock away their phones to counter the emotion to book profits after the recent rally.
While long-term investors could HODL their positions, short-term traders will have to be alert lest they may give back a large part of their unrealized gains.
Let’s analyze the charts of the top-10 cryptocurrencies to see whether the rally has topped out or if it can extend further.
Bitcoin (BTC) closed above $14,000 on Nov. 4 and followed the move with a strong rally on Nov. 5. The price reached an intraday high of $15,956.26 today, which is currently acting as a resistance.
However, the trend is clearly in favor of the bulls and any dip is likely to be viewed as a buying opportunity.
Although the relative strength index has invalidated the negative divergence, it has risen deep into the overbought territory, which suggests that a few days of consolidation or a correction may be around the corner.
If the bulls buy the next dip to $14,000, it will suggest that the previous resistance has flipped to support and this level may act as a floor during future declines.
Sometimes, during a buying frenzy, the RSI can remain deeply overbought for a long time. Hence, if the bulls can push the price above $16,000, a move to the $17,000–$17,200 resistance zone is possible. This is the final hurdle before a shot at the all-time highs.
However, vertical rallies rarely sustain and they usually end with sharp declines. Hence, traders should exercise caution even if the uptrend continues.
The bullish view will be invalidated if the BTC/USD pair turns down and plummets below the $14,000 support.
Ether (ETH) picked up momentum after the bulls pushed the price above the downtrend line on Nov. 4. The upsloping 20-day EMA ($395) and the RSI close to the overbought zone suggest that bulls are in control.
The next target on the upside is $450 and if the bulls can push the price above this resistance, the ETH/USD pair may reach $488.134. Even if the bears offer resistance at $450, the bulls are likely to buy the dips as the sentiment has turned positive.
The first sign of weakness will be a break below the 20-day EMA and the advantage will turn in favor of the bears if the 50-day SMA ($374) cracks.
XRP has largely been range-bound between $0.2295 and $0.26 for the past few weeks. The failure of the bears to break below the range on Nov. 3 attracted buyers who have pushed the price to the resistance of the range.
If the bulls can push and sustain the price above $0.26, the XRP/USD pair could start a new uptrend that may result in a rally to $0.303746. The RSI has risen above 60 for the first time since August, which suggests that the bulls are making a strong comeback.
Contrary to this assumption, if the pair turns down from the current levels or fails to sustain above $0.26, then a few more days of range-bound action is likely. The trend will turn in favor of the bears if the pair plummets below the $0.2295 to $0.219712 support zone.
The rebound off the $231.93 support has reached the 20-day EMA ($255) where the bears may offer resistance. If Bitcoin Cash (BCH) turns down from the current levels, the bears will again try to sink the price below $231.93.
Conversely, if the bulls push the price above the 20-day EMA, the BCH/USD pair could rise to the overhead resistance zone at $272 to $280.
The 20-day EMA has flattened out and the RSI has risen to the midpoint, which suggests a possible range-bound action in the near term.
A breakout of $280 could signal the start of an up-move that may rise to $326 while a break below $231.93 could result in a fall to $200.
The long tails on the candlesticks of the past three days show that the bulls accumulated on dips below the uptrend line. They have currently pushed Chainlink (LINK) above the downtrend line, which suggests that the correction may be over.
The bulls will now try to push the price to the next overhead resistance at $13.28. A breakout and close above this resistance could complete a bullish inverse head and shoulders pattern.
However, the flat moving averages and the RSI just above 55 suggest a range-bound action in the next few days.
This view will be invalidated if the LINK/USD pair turns down from the current levels and breaks below $9.7665.
Binance Coin (BNB) reversed direction from $25.6652 on Nov. 4 and the bulls are currently trying to sustain the price above the 20-day EMA ($28.83). This move suggests that the bears are losing their grip.
If the price sustains above the moving averages, the bulls will try to push the BNB/USD pair to the overhead resistance at $32.
However, if the pair turns down from the current levels, the bears will once again attempt to break the $25.6652 support.
The flat moving averages and the RSI close to the midpoint suggest a balance between supply and demand. This could result in a few more days of range-bound action between $25.6652 and $32.
The successful retest of the breakout level of the inverse head and shoulders pattern on Nov. 3 and 4 attracted strong buying from the bulls who have pushed Litecoin (LTC) above $60.
Both moving averages are sloping up and the RSI is close to the overbought zone, which suggests that bulls are in control.
If the bulls sustain the momentum and drive the price above $64, the LTC/USD pair could rally to $68.9008.
However, the bears are unlikely to give up easily. They are currently attempting to stall the up-move at $64 but unless they pull the price back below $60, the advantage will remain with the bulls.
The failure of the bears to sink Polkadot (DOT) below $3.80 on Nov. 3 and 4 attracted buying and the bulls have pushed the price above the moving averages.
The DOT/USD pair is currently range-bound between $3.80 and $4.95. If the bulls can push the price above $4.6112, the pair may attempt to break above $4.95. If that happens, then a rally to $5.5899 is possible.
Both moving averages are flat and the RSI has risen into the positive territory, which suggests a minor advantage to the bulls. However, if the price turns down from $4.6112 or $4.95, the pair may extend its stay inside the range for a few more days.
The rebound off the $0.0893 support picked up momentum after the bulls pushed Cardano (ADA) above the moving averages. The altcoin is currently attempting to rally to the overhead resistance at $0.1142241.
If the price turns down from the overhead resistance, the ADA/USD pair could remain range-bound between $0.0893 and $0.1142241 for a few days.
However, the flat moving averages and the RSI above 60 suggest that the bulls are attempting a comeback. If the buyers can push the price above $0.1142241, a rally to $0.128 and then to $0.1445 is possible.
This positive view will be invalidated if the pair turns down from the current levels and plummets below $0.0893.
The bulls purchased Bitcoin SV (BSV) on dips to the $146.20 support on Nov. 3 and 4 as seen from the long tails on the candlesticks. The rebound picked momentum on Nov. 5 and the altcoin has currently risen above the moving averages.
If the bulls can sustain the price above the moving averages, the BSV/USD pair could rally to $180.63. The bears may defend this level aggressively as the pair had reversed direction from this resistance on three previous occasions.
Both moving averages are flat and the RSI has risen to the midpoint, which suggests that the range-bound action is likely to continue for a few more days.
Contrary to this assumption, a trending move could start if the bulls push and sustain the price above $180.63 or the bears sink the pair below the $146.20 to $135 support zone.
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.