Bitcoin (BTC) again soared to a new all-time high on Friday as the bulls proceeded to buy on every slight dip. As the price hit a record peak, Bitcoin’s market capitalisation jumped over $775 billion, bringing it past Facebook’s market cap, according to the Companies Market Cap page. This means that there are only six firms in the world that actually have a bigger market value than Bitcoin.
The speed of the rally seems to have taken a few traders off balance. Popular analyst flibflib said that the persistent increase points to “accumulation algorithms and that accumulation algorithms rarely care about the price when their goal is to invest X$ in the Y time period.”
The bull market has attracted a massive trade activity that has exceeded all previous volume records. Along with spot markets, bitcoin futures trading volume has also risen, reaching over $97 billion over a 24-hour span, according to Skew’s results.
Traders must bear in mind that anytime the price changes direction, there will be a lot of sales to contend with and that could result in a sharp correction. On the road to new all-time highs, the market did not pause at the level of resistance, and these same levels of support may prove futile during the fall. Traders must also obey their ideals in money management and not be blinded by greed.
Let’s study the charts of the top-10 cryptocurrencies to spot any topping patterns or levels where the markets may reverse direction.
The long tail on today’s candlestick suggests that bears have attempted to launch a pullback, but the bulls have thwarted their effort and bought an intraday dip. The pattern has been so high that there has been no corresponding three-day reversal since Dec. 12.
The vertical rally of the last few days has driven the relative strength index (RSI) deep into the over-purchased territory, but that has not lowered the demand from the bulls.
The BTC/USD pair could be up to $45,000 next, and if that resistance is scaled up, the uptrend could be up to $50,000. This psychological degree could provide a stiff resistance, which could lead to a correction.
In the drawback, the first aid is the 20-day exponential moving average ($30,539). A good recovery from this boost would hold the uptrend intact.
Conversely, if bears collapse below the 20-day EMA price, the downturn could accelerate with the next support for a 50-day simple moving average of close to $23,218.
Ether (ETH) made a long-legged Doji candlestick on Jan. 7, signalling indecision between the bulls and the bears over the next directional pass. The confusion has overcome the downside today, and bears have reduced the stock to $1,063,322.
The bulls, however, vigorously bought the dip resulting in the formation of a long tail on the day’s candlestick.
If the bulls will drive the market beyond $1,288,668, the ETH/USD pair could be worth $1,420. The bears could try to pose a difficult challenge at this stage, but if they crossed, the momentum could pick up and the pair could climb to $2,000.
Conversely, if the price drops below $1,063,322 from current levels, the pair can drop to the 20-day EMA ($886).
XRP is the only major cryptocurrency not involved in the current bull rally. Traders perceived the potential and moved the market beyond the 20-day EMA ($0.30) on Jan. 7, however selling around the 38.2 percent Fibonacci retracement level prevents the stock from increasing above $0.358202.
The bears are now attempting to lower the market below the 20-day EMA. This indicates that the outlook on the XRP/USD pair remains negative, and traders are selling on the rally. The pair could now stay within the range of $0.169 to $0.385.
Contrarily to this theory, if the bulls will lift the market above $0.385, it would imply that the downtrend is over. This could lead to a 50-day SMA rally ($0.45).
Litecoin (LTC) developed a Doji candlestick pattern on Jan. 7, indicating gains from traders near a stiff overhead resistance of $180. The bears sensed a chance to stall the uptrend and tried to launch a reversal today.
However, the bulls are not in a mood to slow down, and today they vigorously bought the dip, as seen from the long tail of the candlestick. If the LTC/USD pair is $180 more than the stiff overhead resistance, the LTC/USD pair may be $200.
The RSI remains in over-purchased territory, indicating that bears may try again to lift a $180 roadblock. If the price falls due to this opposition, the pair could drop to the EMA of 20 days ($138).
A quick bounce from the 20-day EMA would indicate that the pattern stays bullish, but a break below would raise the likelihood of a deeper correction.
The bulls sought to prolong the uptrend on Jan. 7, but the bears sold vigorously above $0.340. Cardano (ADA) has now corrected the 50% Fibonacci retracement stage at $0.2614241, where sales have appeared.
The long tail on today’s candlestick reveals that traders are using dips to collect as mood appears buoyant. If the bulls are able to drive the price over the overhead support, the ADA/USD will restart the uptrend and rally to $0.40 and then to $0.50.
However, if the bears again successfully protect the overhead zone, the pair may stay within a range of $0.26 to $0.35 for a few days. A break below $0.26 could lead to a deeper reversal of the 20-day EMA ($0.21).
Polkadot (DOT) tried to restart the uptrend on January 7th, but traders booked gains at higher prices. The bears attempted to launch a reversal, but today the altcoin bounced off $8,7788, only above the 38.2 percent Fibonacci retracement mark at $8,5515.
The rising moving averages and the RSI in the positive territory indicate a benefit for the bulls. The DOT/USD pair can rise to $10.68 again. If the bulls are able to drive the price beyond this resistance, the uptrend will restart at $12.39 and then $15 for the next goal.
However, if the pair moves away from the overhead opposition, it might lead to a few days of consolidation. A break below $8.5515 and a 20-day EMA ($7.92) can signal the beginning of a deeper correction.
Bitcoin Cash (BCH) developed a long-legged Doji candlestick pattern on Jan. 7, signalling indecision between bulls and bears about the next strategic leap. Today, the bears have lowered the price, but they could not hold the lower prices, as seen from the long tail on the day’s candlestick.
If the price recovers from the $497 to $515.35 overhead resistance range, it would indicate traders book gains at higher prices. That could keep the BCH/USD pair-bound between $370 and $500 for a few more days.
However, the upward moving averages and the RSI near the overcrowded region indicate that the bulls are in charge. If they can drive the price above the resistance zone, the pair can launch a new uptrend with the first goal at $640.
The long wick on the Jan. 6 and 7 candlestick reveals that traders booked gains at a higher pace. However, bulls are already buying at lower prices, as seen from Stellar Lumens’ (XLM) rebound off the 50 percent Fibonacci retracement mark at $0.266547 today.
After a wide range of days in the last few days, the XLM/USD pair may join a few days of consolidation as traders digest recent gains and settle on the next course of action.
If the bulls could drive the market beyond $0.409, the pair could restart the uptrend that could hit $0.50.
In the opposite, if the price drops and persists below $0.266547, the pair will decline to the 61.8 per cent retracement level at $0.232828 and then to the 20-day EMA ($0.19).
Chainlink (LINK) retreated from the $17,7777 overhead resistance on January 7th, which attracted short-term traders’ profit-booking, which has taken the price down to the 20-day EMA ($13.54) today.
The upward 20-day EMA and the RSI in the favourable zone indicate that the bulls have the upper hand. Thus, traders used the dip to purchase vigorously at lower prices, resulting in a long tail on today’s candlestick.
If the price of the bulls is higher than $17,777, the LINK/USD pair could rally to $20,1111. If this level is also scaled, the Connection price could be raised to $25.
However, if the bears successfully defend the overhead resistance again, the pair would be able to consolidate between $14 and $17,777 for a few days. A fall below the moving averages signifies that the bears are back in the game.
The candlesticks of the last few days show long tails, suggesting that traders booked gains at regular intervals. While dip buyers continued to drive Binance Coin (BNB) higher, the up-move lacked conviction.
If there is little traction over the next few days, the BNB/USD pair will be at risk of correction or consolidation. A break below the 20-day EMA ($37.93) is the first indication of a potential deeper correction.
Contrarily to this theory, if the bulls could push the market above $45, the pair might rally to $50, where the bears could attempt to stall the uptrend.
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