Bitcoin (BTC)'s eight-week winning streak is likely to come to an end as the price has fallen nearly 4% this week. The recent weakness suggests that traders are booking profits, but does not change the short-term uptrend. The retreat will also help reduce any foam that may be created.
After the initial market shakeout, strong hands are likely to re-enter the crypto market as the macroeconomic environment remains positive for risk assets. The Federal Reserve's decision to suspend interest rate hikes and potentially cut rates in 2024 could further boost demand for crypto products.
Daily view of crypto market data. Source: Coin360
However, nothing goes straight up. After sharp increases, traders generally book profits and shift their focus to other coins. As Bitcoin takes a breather, traders will likely turn their attention to select altcoins.
Which coins could attract buyers in the short term? Let's look at the charts of the five most promising cryptocurrencies.
Bitcoin price analysis
Bitcoin is sandwiched between the 20-day exponential moving average ($41,370) and the downtrend line. This creates the conditions for a strong breakout in the next few days.
BTC/USDT daily chart. Source: TradingView
If the price breaks below the 20-day EMA, the bears will sense an opportunity and attempt to pull the BTC/USDT pair to strong support at $37,980. Bulls are expected to defend this level vehemently. If the price recovers from $37,980, it is likely to face selling at the 20-day EMA and again at the downtrend line.
If the price instead rises and breaks the descending trend line, it will indicate that the bulls are asserting their dominance. The pair could then retest the overhead resistance at $44,700. If this level is reached, the prospects of a recovery to $48,000 improve.
BTC/USDT 4-hour chart. Source: TradingView
The moving averages on the 4-hour chart have turned lower and the relative strength index (RSI) is trading in negative territory, suggesting that bears have a slight lead in the near term. The bears need to break the $40,000 support to accelerate selling and send the pair lower to $37,980.
On the other hand, a break above the descending trend line suggests that the bulls have absorbed the selling. The pair could initially rise to $43,500 and then recover to $44,700. At this level, there could be a tough battle between bulls and bears.
Cosmos price analysis
Cosmos (ATOM) has been in an uptrend for several days. Bulls bought the decline from the 20-day EMA ($10.52) on December 16, indicating solid demand at lower levels.
ATOM/USDT daily chart. Source: TradingView
The bulls are attempting to push the price above the immediate resistance at $12.50, but the bears are not relenting. However, the rising moving averages and the RSI in positive territory suggest that the path of least resistance is to the upside.
If buyers push the price above $12.50, the ATOM/USDT pair could rise to $13 and later to $15. If the bears want to prevent the uptrend, they will have to pull the pair back below the 20-day EMA. The pair could then crash to the 50-day SMA ($9.40).
ATOM/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the bears are providing strong resistance at $12, but a positive sign is that the bulls have not allowed the price to fall below the 50-SMA. The rising moving averages and the RSI near the middle give the bulls a slight advantage.
A break above $12 would complete an inverted head and shoulders pattern. This bullish setup has a target of $13.31. On the contrary, if the price declines and breaks below the 50-SMA, the path will be cleared for a decline to $9.50.
Filecoin price analysis
Filecoin (FIL) turned down from $5.67 on November 13th but has regained that level. This shows that lower levels are being bought.
FIL/USDT daily chart. Source: TradingView
The FIL/USDT pair is attempting to form a cup-and-handle formation that will be completed upon a break and close above $5.67. When this happens, the pair signals the start of a new upward move. The reversal setup's pattern target is $8.41.
However, the bears are unlikely to give up anytime soon. They will pose a big challenge at $6.50 and again at $7.40. This bullish view will be invalidated in the near term if the price declines and breaks below the 50-day SMA ($4.61).
FIL/USDT 4-hour chart. Source: TradingView
The bulls pushed the price above the overhead resistance at $5.67 but failed to sustain the higher levels. Sellers are taking advantage of the situation and trying to keep the price below $5.67. If they succeed, the pair could fall to the 20-EMA. This remains an important pillar to keep an eye on.
If the price bounces off the 20-EMA, the prospects of a retest of the overhead resistance at $6.20 improve. A break above this resistance signals the start of the next leg of the uptrend. On the other hand, a break below the 20-EMA could open the door for a decline to $4.40.
Related: Bitcoin fees hit 20-month high as miner revenue matches BTC price of $69,000
MultiversX price analysis
MultiversX (EGLD) turned lower from overhead resistance at $70 on December 12 and reached the 20-day EMA ($55) on December 16.
EGLD/USDT daily chart. Source: TradingView
The rebound from the 20-day EMA suggests that sentiment remains bullish and traders are buying on dips. Bulls will attempt to push the price to $70, which remains the key resistance to watch out for in the near term. If buyers overcome this obstacle, the EGLD/USDT pair could gain momentum and rise to $90 and then to $100.
In the meantime, the sellers may have other plans. They will look to sell the rallies and push the price back below the 20-day EMA. If they succeed, it would signal the start of a deeper correction to the 50-day SMA ($46).
EGLD/USDT 4-hour chart. Source: TradingView
The pair has recently reached support near $57 twice, making this the crucial level to watch out for in the near term. A break and close below this level could open the door for a decline to $48.
On the other hand, if the price rises above $64 from the current level or strong support at $57, it will indicate that the bulls have an advantage. This raises the possibility of a rally to $70, which will likely result in a tough battle between bulls and bears.
Algorand price analysis
Buyers are finding it difficult to push Algorand (ALGO) above the overhead resistance at $0.22, but a positive sign is that they have not given up much ground. This shows that the bulls are expecting a further increase.
ALGO/USDT daily chart. Source: TradingView
Both moving averages are pointing up and the RSI is in positive territory, suggesting that bulls continue to be in charge. Buyers are expected to buy the dip to the 20-day EMA ($0.18). If the price recovers from the 20-day EMA, the bulls will once again attempt to clear the barrier at $0.22.
If they do, the ALGO/USDT pair could rise to $0.24 and then to $0.28. This positive view will be invalidated in the short term if the pair slips and closes below the 20-day EMA. This will signal the start of a deeper correction to the 50-day SMA ($0.14).
ALGO/USDT 4-hour chart. Source: TradingView
The pair has been moving in a range between $0.18 and $0.22 for some time. The 20-EMA has started turning downwards and the RSI has slipped into negative territory, increasing the chances of a decline to $0.18.
Buyers are expected to vigorously defend the $0.18 level as a break below completes a triple top pattern. This bearish setup has a target of $0.14.
If the price bounces sharply from $0.18, it will indicate aggressive buying on downturns. The pair could then rise to the 20-EMA and then to $0.22. A break and close above $0.22 will indicate the start of the next bullish move.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision.
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