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If Bitcoin consolidates near $ 16,000 for a few days, traders can shift their attention to altcoins and DeFi tokens.
Bitcoin ( BTC ) has long been touted as digital gold by cryptocurrency enthusiasts. Now that the digital asset faces its first economic crisis since its birth, Bitcoin has validated the narrative and outperformed gold by a wide margin in 2020. This suggests two important things, Bitcoin is here to stay and is a better bet than gold.
Some popular traditional investors have already jumped on the Bitcoin train, and Whalemap analysts believe institutions have been the top buyers in the $ 12,000 to $ 15,000 range.
Daily view of crypto market data. Source: Coin360
The over-the-counter or OTC trading desk at Galaxy Digital also reported an increase in trading volumes by institutional investors . The CEO of the company, Mike Novogratz, and the head of sales Tim Plakas, showed confidence that more traditional investors and funds could enter the crypto space in 2021.
While most investors appear to be bullish on Bitcoin, the on-chain data suggests that some whales believe that the rally may have peaked in the short term, so they have become sellers .
Let's analyze the charts of the top five cryptocurrencies to determine if the rally can continue longer or if it is a short-term top just around the corner.
Bitcoin ( BTC ) has not closed below the 10-week moving exponential average ($ 15,613) since October 8. This shows that the trend is strong and the bulls have been buying on every minor dip without expecting a major correction.
Daily chart of the BTC / USD pair. Source: TradingView
The rising moving averages and the Relative Strength Index in the overbought territory suggest that the bulls are in control. Buyers are currently trying to hold the price above the immediate support at $ 16,000.
If they are successful, the BTC / USD pair could resume its uptrend with the next target at $ 17,200.
Conversely, if the pair falls below the 10-day EMA, it will suggest that traders will book profits at higher levels. There is minor support at $ 14,800, but if that too cracks, the correction could extend to $ 14,000.
4-hour chart of the BTC / USD pair. Source: TradingView
The 10-day EMA on the 4-hour chart has flattened out and the RSI is close to the midpoint, suggesting a balance between supply and demand. Bearish divergence on the RSI warns of weakening momentum.
If the bears can drag the price below the 50 SMA, a drop to $ 14,800 and then $ 14,400 is possible.
Contrary to this assumption, if the price bounces off the current levels or the 50 SMA and rises above $ 16,500, the next stage of the uptrend could begin.
Ether ( ETH ) has reversed from $ 478,058 on Nov. 13, which is just below stiff overhead resistance at $ 488,134 where the previous rally had peaked on Sept. 1. It is common to expect a certain amount of profit near resistance.
ETH / USD daily chart. Source: TradingView
However, if the bulls do not allow the ETH / USD pair to give up much ground, the chance of a breakout of $ 488,134 will increase . Above this level, the bears can once again try to stop the rally at the psychological level at $ 500.
If the bulls can push the price above the $ 488,134 to $ 500 resistance zone, the rally may extend to $ 550. The rising moving averages and the RSI in the positive zone suggest an advantage for the bulls.
This positive view will be invalidated if the price breaks below the 10-day EMA. If that happens, the pair may drop to $ 420 and then $ 400. Such a move could point to a possible range formation in the near term.
ETH / USD 4-hour chart. Source: TradingView
The 4 hours chart shows that the pair has broken below the support line of the ascending wedge pattern and the RSI has also formed a bearish divergence.
Also, the falling 10 exponential moving average (EMA) and the relative strength index (RSI) in the negative zone suggest that bears have the upper hand.
If the pair sustains below the 50 Simple Moving Average (SMA), a dip to $ 440 and then $ 424 is possible. This short-term bearish view will be reversed if the price turns and rises above $ 478,058.
XRP had been stuck in a range between $ 0.23 and $ 0.26 for more than two months. The range resolved to the upside with a strong breakout of $ 0.26 on November 13. However, bears are unlikely to give up without a fight.
Daily chart of the XRP / USD pair. Source: TradingView
The fight between the bulls and the bears could see the price slide down to the breakout level of $ 0.26. If the bulls buy this dip and the price recovers from the breakout level, it will suggest that traders are buying as they anticipate higher levels in the future.
The rising 10-day EMA ($ 0.258) and the RSI in positive territory suggest that the bulls have the upper hand. The next target on the upside is $ 0.30.
Contrary to this assumption, if the bears cause the XRP / USD pair to drop below $ 0.26 again, it could catch several aggressive bulls off guard, who may have to quickly liquidate their positions.
The ensuing panic selling could sink the pair below the 50-day SMA ($ 0.248) and keep it in range for a few more days.
4-hour chart of the XRP / USD pair. Source: TradingView
The moving averages on the 4-hour chart are rising and the RSI is above 59, which suggests that the advantage is in the bulls.
If the pair rebounds from current levels, it will indicate that the bulls are buying on dips to the 10 EMA, showing that sentiment has turned bullish.
Contrary to this assumption, if the bears sink the price below the 10 EMA, there will be a retest of $ 0.26 within the possibilities. If the price breaks down and stays below this support, it will suggest that the bears have returned.
Monero ( XMR ) had been in a correction since it peaked on October 26. The bulls pushed the altcoin above the downtrend line on November 10 and are currently attempting to push the price above the $ 118.10 to $ 120.7773 resistance zone.
XMR / USD daily chart. Source: TradingView
If successful, the XMR / USD pair could rally to $ 128 and if this level scales as well, the rally can extend to $ 139.2885. The 10-day EMA ($ 115) has leveled off and the RSI is just below the midpoint, suggesting that the selling pressure has eased.
This bullish view will be invalidated if the price turns down from current levels or the upper resistance zone and drops below $ 110 again. Such a move could drag the price down to $ 104.
4-hour chart of the XMR / USD pair. Source: TradingView
The 4-hour chart shows the formation of an ascending triangle pattern that will complete on a breakout and close above $ 118.10. This bullish setup has a target of $ 132.90.
On the other hand, if the bears sink the price below the triangle support line, it will invalidate the bullish setup and could drag the price to $ 110.
Both moving averages are flat and the RSI is just above the midpoint, suggesting a balance between supply and demand. The breakout above or below the triangle could initiate the next short-term trend move.
Uniswap (UNI) bottomed out at $ 1.7563 on Nov. 5 and has since embarked on a strong uptrend . The bullish movement of the last few days has resulted in a rally of more than 136%.
UNI / USD daily chart. Source: TradingView
The 10-day Exponential Moving Average (EMA) ($ 3.27) has appeared and the Relative Strength Index (RSI) has risen from near the oversold zone to the overbought territory. This suggests that the bulls are back in the game. Now they will try to bring the price to the psychological level of $ 5.
This level can act as a resistance as the bears will try to stop the upward move in the $ 5 to $ 5.55 zone . However, if the bulls do not give up much ground in this zone, then the uptrend could continue.
The first sign of weakness will be a breakout below the 10-day EMA. Such a move will suggest a profit reserve on the part of short-term traders and a short circuit on the part of aggressive bears.
4-hour chart of the UNI / USD pair. Source: TradingView
The 4-hour chart shows that both moving averages are rising and the RSI is in the overbought zone. This suggests that the bulls are in control. Immediate resistance is at $ 4.50, where the bears may try to slow the rally.
If the bulls defend the 10-day EMA to the downside, it will suggest that the momentum still favors the bulls. This positive view could be invalidated if the price turns down and sustains below the $ 3.50 support.
Points of view and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and commercial movement involves a risk, you must carry out your own research when making a decision.
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