United States equity markets are on track to end the week in the red, but that has not resulted in a deeper loss for Bitcoin (BTC). The news that cryptocurrency lender Genesis filed for Chapter 11 bankruptcy also had no significant impact on the price of Bitcoin. This shows that the selling pressure could be easing.
However, trading firm QCP Capital warned in the latest issue of its regular markets newsletter that Bitcoin’s current rally was just a bear market relief rally. They anticipate that this recovery will be followed by another bout of selling that could plunge the price of Bitcoin and Ether (ETH) below its 2022 low. QCP used Elliott Wave analysis to reach this conclusion.
After a prolonged bear phase, price action always climbs a wall of worry during the initial days of a new bull market. At that point, several analysts remain incredulous as they continue to expect the price to decline, but traders could spot a trend reversal by watching for higher highs and lows to form.
Are bitcoin and select altcoins showing signs of bottoming out? Let’s study the charts of the top 10 cryptocurrencies to find out.
USDT/BTC
The Bitcoin price has been trading in a tight range between $20,400 and $21,650 for the past few days. Usually, a tight consolidation near stiff resistance is a positive sign, as it shows that traders are not rushing to book profits.
The rising moving averages and RSI in the overbought zone indicate that the path of least resistance is to the upside. The buyers will have to push and hold the price above $21,650 to signal the resumption of the bullish move. The BTC/USDT pair could start its journey towards $25,211.
Conversely, if the bears do not allow the price to rise above $21,650, several traders who may have bought at lower levels could be tempted to book profits. Selling could rise on a break below $20,400.
The next support on the downside is the 20-day exponential moving average ($19,268). If the price bounces off this support, the bulls will try again to clear the overhead hurdle at $21,650, but if the 20-day EMA breaks, the correction could extend to $18,388.
EUR/USDT
The sellers tried to initiate a deeper correction in Ether, but the bulls bought the dip near $1,500 on Jan. 18. This shows that the bulls are buying on minor pullbacks.
The bulls will try to push the price above the upper resistance zone between $1610 and $1680. If they succeed, the ETH/USDT pair could move to $1,800. This level may again act as a barrier, but if the bulls break above it, the pair could reach $2,000.
If the bears want to weaken the momentum, they will have to defend the upper zone and pull the price below $1,500. The pair could then slide to the 20-day EMA ($1,428), which may attract buyers.
USD/USDT
BNB (BNB) bounced off the 20-day EMA ($281) on Jan. 19, but the bulls are struggling to maintain momentum as higher levels attract sellers.
The zone between the 20-day EMA and the 50-day SMA ($268) is important to watch because if the price goes higher, the bulls will try again to push the BNB/USDT pair above $318. If they do, the pair will complete a bullish inverse head and shoulders pattern.
On the other hand, if the price continues lower and breaks below the moving averages, it could clear the way for a potential drop to $240 and then $220.
USD/XRP
XRP (XRP) found support at the moving averages on January 18 and appeared on January 19. This signals strong buying at the 20-day EMA ($0.37).
The buyers will try to keep up and push the price to the above resistance at $0.42. This is a key level for the bears to defend because if cleared, the XRP/USDT pair could rally to $0.51 as there is no major hurdle in between.
The bears likely have other plans as they will once again try to push the price below the moving averages. If they manage to do that, the pair could plummet to the support line where buying can emerge.
ADA/USDT
Cardano (ADA) broke out from the support line of the flag pattern on Jan. 19, which is a positive sign. Buyers will try to push the price above the flag to signal the start of the next leg of the move higher.
On a break above the flag, the bears can mount a strong defense at $0.37 but if the bulls break above this barrier, the ADA/USDT pair could skyrocket to $0.44. This level may once again be a sticking point for the bulls.
This positive view could be invalidated in the short term if the price turns down and breaks below the flag. That could attract more short-term selling from traders and the pair could drop to the 50-day SMA ($0.29).
DOGO/USDT
Buyers tried to push Dogecoin (DOGE) above $0.09 on Jan. 18, but the bears aggressively protected the level as seen from the long wick on the day’s candle.
The bulls held the support at the 20-day EMA ($0.08) on the downside, but the weak bounce on the 19th and 20th of January indicates hesitation to buy aggressively. This may embolden the bears who will try to sink the DOGE/USDT pair below the 20 day EMA.
If they do that, the pair could drop to strong support near $0.07. The flattening of the 20 day EMA and the RSI just above the midpoint indicate possible range-bound action in the near term.
If the bulls want to maintain their advantage, they will have to clear the $0.09 hurdle. The pair could then start its march north at $0.11.
MATIC/USDT
Polygon (MATIC) is trading within the wide range between $0.69 and $1.05. Generally, in a well-established range, traders buy near support and sell near resistance.
That is what happened with the MATIC/USDT pair which rejected the overhead resistance at $1.05. The first line of support is at the 20-day EMA ($0.90). Buyers held this level on January 19, but will need to push the price above $1.05 to start a new move higher.
Alternatively, if the price breaks below the 20 day EMA, it will indicate that the pair may extend its range stay for a few more days. The short-term advantage could tilt in favor of the bears on a break below the 50-day SMA ($0.86).
Related: Bitcoin Eyes $21.4K Zone As Analyst Predicts BTC Price To Chase Gold
USDT/USDT
Litecoin (LTC) broke out of the 20-day EMA ($81) on Jan. 19, indicating that the bulls see dips as a buying opportunity.
The bulls will try to push the price to $91, where they may encounter stiff resistance from the bears. If the bulls break above $91, the LTC/USDT pair could accelerate and reach towards the psychologically important level of $100 and then $107.
Another possibility is that the bounce fizzles out and does not exceed $91. That could increase the probability of a break below the 20 day EMA. The pair could break down to the breakout level of $75.
POINT/USDT
Polkadot (DOT) continues to witness a seesaw battle near the downtrend line. This indicates that the lower levels are attracting buyers, but the bears are selling rallies.
The rise from the 20-day EMA ($5.34) and the RSI into the positive territory suggest that uncertainty may be resolved in favor of the bulls. Buyers will have to push the price above $6.53 to take over. If they can pull it off, the DOT/USDT pair could skyrocket to $7.42 and then $8.05.
Contrary to this assumption, if the price turns down and falls below the 20-day EMA, it will indicate that the bears have beaten the bulls. That could lower the price to the 50-day SMA ($5).
AVAX/USDT
Avalanche (AVAX) turned down from the resistance line on Jan. 14, but the bears failed to push the price to the 20-day EMA ($14.72). This suggests that sellers may be losing control.
The buyers will make one more attempt to push the price above the resistance line. If successful, the AVAX/USDT pair could pick up momentum and rally to $22 and then $24. The rise of the 20-day EMA and the RSI close to the overbought zone indicate an advantage for the buyers.
This positive view could be reversed in the short term if the price turns down and breaks below the 20 day EMA. That could attract more selling and the pair could extend its decline to the 50-day SMA ($13.09).
The views, thoughts and opinions expressed here are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
