Bitcoin (BTC) and most major cryptocurrencies are stuck in a tight range, with bulls buying near support and bears selling at resistance levels. Usually, these narrow bands are followed by an increase in volatility.
While some analysts have not ruled out a quick drop to $40K, most traders are expecting Bitcoin to rebound strongly to $60K.
Goldman Sachs said in a note to investors that if Bitcoin continues to increase its market share against gold as a store of value and crosses the 50% mark, it could reach $100,000 over the years. the next five years.
Cross-chain analytics provider Glassnode said in its report Monday that the illiquid supply of Bitcoin has risen to more than 76% of the total supply in circulation. According to Glassnode researchers, the decline in liquid supply indicates that price capitulation appears unlikely in the near future.
Could a sharp drop in Bitcoin surprise and drag major currencies lower? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC / USDT
Bitcoin price is located between the 20-day exponential moving average ($48,033) and the critical support at $45,456. Although both moving averages are declining, the Relative Strength Index (RSI) is trying to form a positive divergence. This indicates that selling pressure may decrease.
If the bulls push the price and hold above the 20-day moving average, the BTC/USDT pair could reach $51936.33. This level is likely to act as severe resistance. If the price declines, the pair could stay in a range between $51936.33 and $45,456 for a few more days.
A breakout and a close above $51936.33 would signal the start of an upward movement that could reach $60K. Conversely, if the price drops below $45,456, selling may intensify and the pair may then fall into the $42,000-$40K support area.
ETH / USDT
Ether (ETH) cut its 20-day moving average ($3881), but the positive sign is that the bulls are not giving up much ground. This indicates buying on dips. The bulls will now attempt to push the price back above the 20 day moving average.
If they do, it will indicate that the repair is complete. ETH/USDT could move up to the 50-day simple moving average ($4,086), which could act as resistance once again. A breakout and a close above this level would signal the beginning of a rally to $4,488 and then an all-time high at $4,888.
Contrary to this assumption, if the price drops from the 20-day moving average, a drop to the support area from $3643.73 to $3503.68 is possible. This is an important support for the bulls to defend as a breakout and a close below could open the door for a potential drop to $3,270 and then $2,800.
BNB / USDT
Binance coin (BNB) has pulled back from the 20-day moving average ($530) and is currently supporting the psychological level at $500.
If the bears move and hold the price below the $500 support area at $489.20, selling momentum could accelerate and BNB/USDT could drop to $435.30. The bearish moving averages and the RSI in negative territory indicate an advantage for the bears.
Conversely, if the price rebounds from the current level, it will indicate that the bulls continue to defend this support. They will then make another attempt to push the price above the 20 day moving average. If that happens, the pair could reach $575.
SOL / USDT
Solana (SOL) rejected the 20-day moving average ($178) on Jan. 2, saying the bears are selling on every slight rally. The bears will now attempt to pull the price below the strong support level at $167.88.
If they succeed, the price of SOL/USDT could drop to $148.04 which could provide strong support. If the bounce from this level does not exceed $167.99, this will indicate that demand is drying up at higher levels.
This may lead to an intensification of the selling and the pair could drop to the critical support level at $120. The bulls will need to push the price and hold above the moving averages to signal that selling pressure may be easing. After that, the pair may rise to $204.75.
ADA / USDT
Cardano (ADA) traded between the 20-day moving average ($1.36) on the upside and $1.28 on the downside. This is a slight bright spot because it indicates that the bulls are not ready to give way to the bears.
The 20 day EMA is fading and the RSI is just below 46, indicating that selling pressure may be easing. If the bulls push the price above the moving averages, the ADA/USDT might reach $1.60 and then hit the channel resistance line.
A breakout and a close above the channel will indicate that the downtrend may be over. This positive opinion will be invalidated if the price drops below $1.18. This could push the price towards the critical support level at $1.
XRP / USDT
XRP fell below the 20-day moving average ($0.86) on January 3, indicating that sentiment remains negative and traders are selling on relief rallies.
The long tail of the January 4 candle is showing strong buying in the $0.77 to $0.75 support area. XRP/USDT can now be combined between $0.75 and the 20-day moving average for the next few days.
A breakout and a close above the moving averages could pave the way for a rally to $1. If the bulls overcome this hurdle, the pair could start its journey towards strong air resistance at $1.41. Alternatively, if the price breaks and closes below $0.75, the pair could drop to $0.60 and then $0.50.
Moon / USDT
Terra’s LUNA token dropped from air resistance at $93.81 on Jan. 3 and reached the 20-day moving average ($83). This indicates that the bears are selling on rallies.
If the bears pull the price below $81.11, the selling could intensify as short-term traders may rush out. LUNA/USDT could drop first to $76.72, then extend the decline to the 50-day simple moving average ($67).
Contrary to this assumption, if the price bounces off $81.11, this will indicate that the bulls continue to buy at the lows. The bulls will then make another attempt to breach the air barrier at $93.81 and push the pair to an all-time high of $103.60.
Related: Bitcoin monthly RSI lowest since September 2020 new ‘oversold’ signal
DOT / USDT
Polkadot (DOT) has been trading between the 20-day moving average ($28) and the general resistance at $31.49 over the past few days. The 20-day stable EMA and the RSI just above the mid-point indicate an equilibrium between supply and demand.
If the price breaks and closes above the $31.49 to $32.78 resistance area, this will indicate that the metrics are tilting in favor of the bulls. DOT/USDT could then start its march north towards $40.
Conversely, if the price drops below the 20-day moving average, the pair can extend its stay in the $31.49 to $22.66 range for a few more days. Bears will need to sink and hold below $22.66 to signal a resumption of the decline.
AVAX / USDT
The avalanche (AVAX) fell below the moving averages on January 4, indicating that the bears are aggressively defending the downtrend line. The flat 20-day EMA ($107) and the Relative Strength Index (RSI) just below its mid-point indicate a stable condition between the bulls and bears.
If the price settles below the moving averages, the bears will try to push the AVAX/USDT pair below $98. If they succeed, the pair could drop to the strong support level at $75.50.
Conversely, if the bulls push the price back above the moving average, the pair can move up to the downtrend line. A breakout and a close above this level will indicate a possible change in trend. The pair could first reach $128 and then retest the all-time high at $147.
DOGE / USDT
Dogecoin (DOGE) has been trading in a narrow range between the 20-day EMA ($0.17) and $0.16 over the past few days. This indicates that bulls and bears are not placing big bets and playing it safe.
Usually, narrow bands follow sharp movements. The bearish moving averages and the RSI are in negative territory, indicating that the path of least resistance is to the downside.
If the price drops below $0.16, the bears will attempt to pull DOGE/USDT below the strong support level at $0.15. If they succeed, it could lead to a drop to $0.13 and then $0.10.
On the flip side, if the price breaks above the current level and breaks through the 20-day EMA, the pair may rise to the strong resistance at $0.19. Bulls will need to cross this hurdle to signal a possible change in trend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN. Every investment and trading movement involves risks. You should do your research before making a decision.
Market data is provided by HitBTC exchange.