bitcoin (btc) had a good week with prices rising around 10% to reach the psychologically important $30,000 level. After the rally, the question that worries investors is whether the uptrend will continue or if it is time for a reversal.
The Stockmoney Lizards trading team recently said that bitcoin could soon break above its overhead resistance and begin a strong rally. They believe the approval of the exchange-traded fund will boost its mass adoption and trigger the rally ahead of the halving planned for April 2024.
A positive development this week was that bitcoin‘s strength rubbed off on several altcoins, which broke out of their respective upper resistance levels. This suggests that sentiment is gradually turning positive and it may be time to consider buying selectively.
Typically, the currencies that lead markets higher are the ones that tend to perform well. Laggards are generally the last to perform, so they could be avoided initially.
Let’s take a look at the charts of the top 5 cryptocurrencies that may outperform in the short term.
bitcoin price analysis
bitcoin is witnessing a tough battle between bulls and bears near the $30,000 mark, but a positive sign is that buyers have not given up much ground.
A consolidation near the current level suggests that the bulls are in no rush to book profits as they anticipate another leg higher. That could catapult the price to the upper resistance zone between $31,000 and $32,400.
On the contrary, if the price turns down from $31,000, the btc/USDT pair could fall to the 20-day exponential moving average ($28,160). If the price rises again from this level, the bulls will again try to overcome the general hurdle.
The positive sentiment will be nullified in case of a break below the 20-day EMA. That could keep the pair stuck within the $31,000 to $24,800 range for some time to come.
The pair is in an uptrend as seen on the 4-hour chart. Typically, during a rally, traders buy the dip all the way to the 20 EMA. If that happens, it will indicate that the sentiment is still bullish and they are buying every small dip. The pair could then continue its journey towards $32,400.
On the contrary, if the price falls below the 20 EMA, it will indicate that traders may be closing their positions hastily. That could open the doors to a further decline to the important support at $28,143.
Solana Price Analysis
Solana (SOL) broke out of the neckline on October 19, completing a bullish inverse head and shoulders pattern. This setup has a target of $32.81.
The overbought levels of the Relative Strength Index (RSI) suggest that a correction is possible. The important support to watch on the downside is $27.12. A strong bounce off this level will indicate that the bulls have turned the level into support. This will improve the prospects for the uptrend to continue. Above $32.81, the rally could reach $39.
The bears are running out of time. If they want to stop the bullish movement, they will have to drag the price below $27.12. The SOL/USDT pair could fall to the neckline. This remains the key level to watch because a drop below it will suggest that the break above $27.12 may have been a fake.
The 4-hour chart shows that the bulls are facing strong resistance near $30. This may start a pullback that could reach the breakout level of $27.12. Buyers are expected to defend this level vigorously. A solid rebound from this level may suggest resumption of the bullish movement.
On the contrary, if the price declines and falls below $27.12, it will indicate that the bears are selling aggressively at higher levels. Then, the pair may sink to the neckline near $24.50. This level may again witness heavy buying by the bulls.
Chain price analysis
Chainlink (LINK) has been trading within a tight range between $5.50 and $9.50 since May 2022, indicating a balance between supply and demand.
The bulls attempted to resolve the upside uncertainty with a break above the range on October 22, but the long wick on the candle shows that the bears are unwilling to budge. If the bulls do not give up much ground from current levels, prospects for a rally above $9.50 will improve.
The LINK/USDT pair could then initiate a move towards the pattern target of $13.50. Typically, a breakout of a long consolidation results in a strong rally. In this case, the bullish trend can extend to $15 and later to $18.
The first support on the downside is at $8.50. If the bears push the price below this level, it will suggest that the range-bound action may continue for a while longer.
The pair witnessed a strong rally from $7.50, which pushed the RSI deep into the overbought territory on the 4-hour chart. This suggests that the rally is overextending in the near term and could lead to a pullback or consolidation.
Solid support on the downside is $8.75 and then $8.50. A strong bounce in this area will suggest that sentiment remains positive and that traders are buying the dips. That will increase the possibility of a retest of $9.75.
Conversely, a break below the 20-EMA will indicate that the bears are back in the game. The pair can then reach $7.
Related: Lightning Network faces criticism from pro-XRP lawyer John Deaton
Aave Price Analysis
Aave (AAVE) broke above the downtrend line on October 21, invalidating the bearish descending triangle setup. Generally, the failure of a negative setup initiates an upward movement.
Both moving averages have started to rise and the RSI is in overbought territory, indicating that the bulls have the upper hand. If the price stays above the downtrend line, the AAVE/USDT pair may rise first to $88 and then to $95.
If the bears want to avoid this bullish move, they will have to quickly lower the price below the downtrend line. That may catch some aggressive bulls on the wrong foot and initiate a moving average correction. A drop below the 50-day simple moving average ($62) will put the bears back in the driver’s seat.
The 4-hour chart shows that the bears tried to stop the relief rally at the downtrend line, but the bulls did not give much ground. Momentum accelerated and the pair is on its way towards $88.
A minor concern in the short term is that the RSI has spiked into overbought territory, indicating that a consolidation or correction is possible. On the way down, the first support is at $72. The bears will have to pull the price below the downtrend line to catch the bulls.
Battery price analysis
Stacks (STX) have risen sharply in recent days, indicating that the bulls are attempting to start a new uptrend.
The bullish crossover in the moving averages suggests that the bulls have an advantage. In the short term, overbought RSI levels indicate that a small correction or consolidation is possible. The first support on the downside is the 20-day EMA ($0.54).
If the price bounces off this level, it will indicate a change in sentiment from selling on rallies to buying on dips. This will increase the probability of the upward movement continuing. The STX/USDT pair could rise first to $0.80 and then to $0.90.
This positive view will be invalidated in the short term if the price declines and falls below the 20-day EMA.
The price has been consolidating in a tight range between $0.61 and $0.65, as seen on the 4-hour chart. This is a positive sign as it shows that the bulls are not rushing towards the exit as they anticipate another bullish leg. If buyers push the price above $0.65, the pair will try to rise to $0.68 and then $0.75.
Contrary to this assumption, if the price turns lower and falls below the 20 EMA, it will indicate that short-term traders are booking profits. Then, the pair may fall to the 50-SMA.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
