Bitcoin (BTC), and many other altcoins, have retreated from their high support levels. But could this rally continue to the point that traders are confident that there is a bottom?
Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, stated that Bitcoin’s current price is 30% below its 20 week moving average. This position is similar to what led to bottom formations between March 2020 and July 2021.
According to CryptoQuant data, Bitcoin’s balances have dropped from 2.428 Million Bitcoin on December 28th to 2.366 Million Bitcoin on January 24th. This suggests that investors might be safe-keeping their recent purchases.
Everyday cryptocurrency market performance. Source: Coin360
It may not be a V-shaped recovery of Bitcoin, as volatility will likely remain high. Traders will be watching closely the U.S. Federal Reserve’s decision after its two-day policy meeting, Jan. 26.
Can Bitcoin and major altcoins continue their relief rally? Let’s look at the charts for the top 10 cryptocurrencies to see how they compare.
Bitcoin’s Jan. 24, candlestick has a long tail that shows aggressive buying at lower levels. The bulls have continued to buy, pushing the price higher than the immediate resistance of $37332.70.
Daily chart of BTC/USDT Source: TradingView
The BTC/USDT price could reach the 20-day exponentialmoving average ($40.438) which has been acting in strong resistance during relief rallies. The bears will attempt to lower the pair below $32,917.17 if the price falls from this resistance. The pair could fall to $30,000. If they succeed.
However, if the price rises above the 20-day EMA, it could lead to a rally to the 50 day simple moving average ($44935). The first sign that the correction phase is over could be a break or close above the resistance. The 200-day SMA (48,750) could be retested by the pair.
The long tail of the day’s candlestick shows that Ether (ETH), jumped sharply off $2,159 on January 24. This indicates that bulls are buying aggressively at lower levels.
Daily chart of ETH/USDT Source: TradingView
The price has fallen today due to sustained buying. This is the first sign that there is strength. Buyers will now push the price higher than the overhead resistance of $2,652.
If they can do so, the ETH/USDT exchange rate could reach the 20-day EMA ($2,966). This level is likely to be defended by the bears.
If the price falls below the 20-day EMA it will indicate that sentiment is still negative and traders are buying rallies. The bears will attempt to reestablish the downtrend by bringing the pair below $2159.
Binance Coin (BNB), rebounded strongly from the $330 support on January 24, as seen by the long tail of the day’s candlestick. This indicates that buyers are aggressively buying near $330.
Daily chart BNB/USDT TradingView
On Jan. 25, the bulls pushed the price inside the channel and now they will attempt to drive BNB/USDT to the 20-day EMA ($435). The pair could rally towards the resistance line if this obstacle is overcome.
Contrarily, if the price drops below the 20-day EMA or current level, traders will continue to sell during rallies. The bears will attempt to lower the pair below the strong support area at $330-320.
Cardano (ADA), trying to bounce from the strong support at $1. This indicates that bulls are buying dips to this level. The 50-day SMA ($1.28) could be reached by the relief rally.
Daily chart ADA/USDT Source: TradingView
Bulls pushing the price above 50-day SMA could cause the ADA/USDT to rally to resistance at the descending channel. An upward trend change could be signaled by a break or close to the channel.
If the price falls below the moving averages, this will indicate that bears continue selling on rallies to high resistance levels. The bears will attempt to keep the price below $1 by trying again. The pair could fall to $0.80 if they succeed.
On Jan. 24, the bulls successfully defended the support channel of the descending channel as seen from the long tail of the day’s candlestick. Solana (SOL), if bulls push the price higher than $104.82, could reach the 20 day EMA ($125).
Daily chart of SOL/USDT Source: TradingView
The first sign that selling pressure is decreasing is a break above the 20-day EMA. The SOL/USDT currency pair could then move up to the resistance line at the channel’s descending channel. To signal a change of trend, the bulls will need to push the price higher than the channel.
If the price drops below the 20-day EMA it will indicate that bears are continuing to sell rallies. The bears will attempt to sink the pair below that channel again. If they succeed, bearish momentum will pick up and the pair may drop to $50 psychological support.
For the past few days, Ripple (XRP), has traded within a narrow range of $0.65 to $0.54. This indicates that bulls and bears have been playing safe and not placing large bets.
Daily chart of XRP/USDT Source: TradingView
The bears are in control of the market, as the downsloping 20 day EMA ($0.70), and relative strength index (RSI near the oversold territory suggest. The psychological support of $0.50 could be reached if the price drops from $0.64 to $0.70.
Contrary to the assumption, if bulls push the price above $0.64, then the pair could challenge 20-day EMA. If the resistance is broken, a close above it could allow for a move to the 50-day SMA ($0.79). To signal a possible trend change, the bulls must clear this hurdle.
Terra’s LUNA token trades within the descending channel pattern. The downsloping 20 day EMA ($73), and the RSI in negative indicate advantage for sellers.
Daily chart of LUNA/USDT Source: TradingView
The LUNA/USDT price pair could drop back to the channel support line if bears push the price below $59.13. This level has been held over the last two declines and the bulls will defend it again.
The pair could reach the 20-day EMA, then rally towards the channel’s downtrend line. The first sign the downtrend may be over is a break and close above channel.
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As seen from the candlestick’s long tail, the buyers purchased the dip below $0.13 again on January 24. This triggered a relief rally that drove Dogecoin to the 20-day EMA ($0.15).
Daily chart of DOGE/USDT Source: TradingView
Bulls could drive the price higher than the moving averages and the DOGE/USDT pairs could rally to $0.19 as the overhead resistance. The pair could stay within the $0.19-$0.13 range for the next few trading days if the price falls below this resistance.
Contrary to popular belief, a decrease in the price from the moving averages will indicate that the demand is drying up at higher levels. The bears will attempt to maintain a price of $0.13 or lower. If they succeed, the bears will attempt to pull the price below $0.13.
For the past few days, the bulls have held Polkadot(DOT) above critical support of $16.81. This could encourage short-term traders to buy more, pushing the price towards the $22.66 breakeven point.
Daily chart of DOT/USDT Source: TradingView
The 20-day EMA ($22.77), is sloping downward and the RSI in the negative zone. This indicates that bears hold the upper hand. This level is likely to encounter stiff resistance for the DOT/USDT pairing.
The bears will attempt to bring the pair down to $16.81 if the price falls below the 20-day EMA. The pair could be range bound for a few more days if this support holds.
A break below $16.81 could trigger the next leg in the downtrend, while a break above 50-day SMA ($25.88), may allow for a rally to $32.78.
The failure of bears to sink Avalanche, (AVAX), below the $51.04-$47.66 support zone might have attracted bullish buying who have pushed it above the 200 day SMA ($65).
Daily chart of AVAX/USDT Source: TradingView
The AVAX/USDT pairing could rise to the breaking point at $75.50, where bears might mount stiff resistance. This level is important to monitor as the 20-day EMA ($80), is just below it.
The bears will attempt to lower the pair below 200-day SMA if the price drops from the breakdown level. The pair could drop again to $51.04. A break above the 20-day EMA and close could also open the doors to a rally towards the downtrend.
Risk is inherent in every investment or trading move. Before making any investment or trading move, you should do your research.
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I am a technology and gaming writer by profession. I love NFT’s and play to earn gaming such as Axie Infinity. I love writing about anything on the blockchain, especially gaming and entertainment. I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.