5 Cryptocurrencies Traders Should Watch This Week
Some crypto currency units, while the highest level of all-time, $ 33,000 Bitcoin ‘remained constant under.As Bitcoin price trading goes sideways, traders are wary of new purchases from institutional investors to gauge whether the BTC correction is over.MicroStrategy’s recent purchase of 314 Bitcoins at an average price of $ 31,808 is a mild sentiment enhancer, but may not be enough to stop the decline unless buyers step in and keep their purchases higher.
A recent timeframe analysis by QCP Capital split the Asian and US trading sessions into a 12-hour window and found that the Bitcoin price rose during U.S. hours due to constant purchases from institutional investors since March 2020. However, this acquisition momentum from the US has shown signs of depletion for the first time since Bitcoin peaked about two weeks ago.
While keeping an eye on institutional investor inflow is a good strategy, it’s also important to watch what’s happening on the retail side. In the past few months, retail investor volume has recovered, and this is supporting worldwide stock markets.
Bitcoin may be struggling to regain its all-time high, but during this time a handful of altcoins rose to new highs. This shows that retail traders are currently focusing on altcoins.
Let’s examine the charts of the top 5 cryptocurrencies that may be trending in the next few days.
BTC / USD
Bitcoin’s exit from the 50-day simple moving average ($ 28,632) faces resistance near the 20-day exponential moving average ($ 33,775). Failure to climb above the 20-day EMA is a negative sign as it indicates a possible change from buy to sell in every rally.
The 20-day EMA has begun to decline and the relative strength index (RSI) is trading below the 50 level. This shows that the bears are trying to make a comeback. The candlestick pattern on January 23rd and today’s inner day shows the indecision between the bulls and the bears.
If uncertainty resolves negatively, the bears will try to establish their advantage and lower the BTC / USD pair below the 50-day SMA. If they succeed, it could result in a deeper retracement at the 50% Fibonacci retracement level from $ 25,897.42 and then the 61.8% retracement level at $ 22.106.73.
Conversely, if the bulls push the price above the 20-day EMA, the pair could rise to the bearish trend line. There are chances of encountering hard resistance here again. If the price drops below this level and drops below the 20-day EMA, it will show that the bears are selling in the rallies, but if the bulls push the price above the downtrend line, it will show that the correction may be over.
A close above the downtrend line will increase the likelihood of being retested at an all-time high of $ 41,959.63. A break above this resistance could result in a spike in the $ 50,000 price.
The downward moving averages and the RSI in the negative zone on the 4-hour chart show the bears domination. The price action shows a bearish trend triangle formation that will complete with a collapse and close below $ 30,450. The pattern target for this setup is $ 18,940.37.
Contrary to this assumption, if the bulls can push the price above the moving averages, the pair could rise to the downtrend line. This is a critical resistor to watch out for because a break on it will invalidate the fall setup. In such a situation, the aggressive bears could be caught on the wrong side, resulting in a short squeeze that could push the price to an all-time high.
ETH / USD
Ethereum (ETH) has climbed above the overall resistance of $ 1,300 and the bulls are trying to maintain the upward movement. The upward moving averages and the RSI above 61 suggest the bulls are in control.
If the price stays above $ 1,300, the ETH / USD pair could retest the all-time high at $ 1,438. A break above this resistance and a close could start the journey to the target towards $ 1,675.
On the other hand, if the price breaks down from general resistance, the pair could drop to the 20-day EMA ($ 1,166). The recovery of this support will increase the likelihood that the uptrend will restart.
However, if the next bearish breaks below the bullish trend line, it will indicate a possible change in trend.
The bears are currently trying to defend the $ 1,350 overall resistance. If the price falls from the current level, it can find support in the moving averages. A jump from this level will indicate that the bulls are buying at every small drop, increasing the likelihood of a break towards the $ 1,350 price.
Contrary to this assumption, if the bears pull the price below the moving averages, the pair may fall into an uptrend. A break below this support will indicate a change in sensitivity and cause a deeper correction.
DOT / USD
Polkadot (DOT) is currently moving limited between the $ 19.40 high and the 38.2% Fibonacci retracement level at $ 14.7259. A consolidation near an all-time high is a positive sign as it shows that traders are not in a hurry to profit.
The bears are currently defending overall resistance at $ 19.40. This could prolong the DOT / USD holding in range for a few more days.
However, the rising 20-day EMA ($ 14.11) and the RSI near the overbought zone show that the bulls are dominating. If buyers can push the price above $ 19.40, the next leg of the uptrend could begin. The first target on the upside is $ 24 followed by $ 30.
This positive view will become invalid if the pair drops and falls below the 20-day EMA. Such a move could open the possibility of a deeper drop to the 61.8% Fibonacci retracement level at $ 11,8383.
The pair has stepped back from general resistance, indicating that the bears are unwilling to give up without a fight. The flattening 20-EMA on the 4-hour chart and the RSI near the midpoint indicate a balance between supply and demand.
If the bears break the pair below the 50-SMA, a drop to $ 16 and then to $ 14.7259 is possible. The bulls will likely buy this drop and try to keep the price within the range. The next trend move could begin after the price hits above $ 19.40 or drops below $ 14.7259.
AAVE / USD
AAVE is in a strong uptrend and has been reaching new highs for the past few days, indicating that traders keep buying at every high. In the uptrend, the bulls bought the 20-day EMA dips and this was seen in the last decline on January 21st.
The current leg of the uptrend has a price target at $ 263.23 followed by $ 294,229. The wick on today’s candlestick indicates that the bears are trying to stop the rally near psychological resistance of $ 250.
If the price falls from the current level, initial support is at $ 200 and then at $ 166 at the 20-day EMA. The upward moving averages and the RSI in the overbought zone indicate that the bulls are in command.
The first sign of weakness will be a breakdown and close below the 20-day EMA. Such a move would show that supply exceeds demand from bottom buyers and this could be a sign of a trend change.
The 4-hour chart shows the price is trading within an ascending channel. If the price falls from the current levels, it could fall into the support line of the rising channel where buyers are likely to come into play.
A break below the channel could lower the price to the 20-EMA. A strong recovery from this support will indicate that the bulls continue to accumulate in dips. However, a break below the moving averages will open the doors for a deeper correction.
SNX / USD
Synthetix (SNX) witnessed a sharp correction on Jan.21, but recovered quickly and is currently trying to continue its uptrend. Aggressive buying near the 50% Fibonacci retracement level at $ 10,744 on January 22 indicates lower levels of demand.
Both moving averages are rising and the RSI bounces off the midpoint, indicating that the path of least resistance is up. If the bulls can push the price above $ 17,150, the next leg of the uptrend could begin.
On the upside, the next target is $ 20 followed by $ 24,083. However, if the price drops from $ 17,150, the SNX / USD pair could drop to the 20-day EMA ($ 13.68), which will likely serve as a strong support.
The 4-hour chart shows the bears trying to defend the $ 17 overall resistance. If the price falls from the current level, the pair could fall to the moving averages and then to $ 14. A consolidation at $ 14 to $ 17 will be a positive sign, increasing the likelihood of a break above $ 17.15.
Contrary to this assumption, if the price drops below $ 14, the correction could deepen to $ 11,263.