Bitcoin (BTC), and many major altcoins, are stuck in tight ranges with bulls buying close to the support level and bears selling at the resistance levels. These tight ranges are usually followed by an increase in volatility.
While some analysts aren’t ruling out a rapid drop to the low $40,000s for Bitcoin, most traders anticipate Bitcoin to rebound quickly and rise to $60,000.
In a note to investors, Goldman Sachs stated that Bitcoin could rise to $100,000 if it continues to grow its market share as a store-of-value over gold and crosses the 50% mark.
Everyday cryptocurrency market performance. Source: Coin360
Glassnode, an on-chain analytics provider, reported Jan. 3 that Bitcoin’s illiquid supply had increased to more than 76%. Glassnode researchers believe that the decline in liquid supply indicates that price capitulation is unlikely in the near future.
Could Bitcoin surprise us with a sharp decline and pull major altcoins lower. Let’s look at the charts for the top 10 cryptocurrency coins to see how they compare.
The Bitcoin price is located between the 20-day exponentially moving average (EMA), ($48,033) as well as the critical support at $45,456. Despite both moving averages being in decline, relative strength index (RSI), is trying to create a positive divergence. This suggests that selling pressure may be decreasing.
Daily chart of BTC/USDT Source: TradingView
The BTC/USDT pair could reach $51,936.33 if bulls continue to push the price higher than the 20-day EMA. This level will likely act as a strong resistance. The pair could stay range-bound for a few days if the price falls from it.
If the price breaks and closes above $51,936.33, it will signal the beginning of an up-move. This could potentially reach $60,000. If the price falls below $45,456 the selling could accelerate and the pair could drop to the $42,000-$40,000 support zone.
Although Ether (ETH), declined from the 20-day EMA (3,881) the positive sign is that bulls have not lost much ground. This means that buyers should buy on dips. Bulls will now try to push the price above the 20-day EMA.
Daily chart of ETH/USDT Source: TradingView
This will signal that the correction is over. The ETH/USDT currency pair could then move up to the 50-day SMA ($4,086) which could act as resistance. If the pair breaks and closes above this level, it will signal an up-move towards $4,488, and then the all-time high of $4,888.
Contrary to popular belief, a fall to the $3.643.73-$3,503.68 support zone could be possible if the price drops below the 20-day EMA. This support is crucial for bulls to protect as a break or close below it could lead to a decline to $3270, and then to $2800.
Binance Coin (BNB), which has declined from the 20-day EMA ($530), is currently receiving support at the psychological level of $500.
Daily chart BNB/USDT TradingView
Bears that sink below $500 to $489.20 could cause selling momentum to pick up, and the BNB/USDT pair may drop to $435.30. Bears have an advantage because of the RSI in negative territory and the moving averages that are downsloping.
If the price bounces off its current level, this will indicate that bulls are continuing to defend their support. The bulls will attempt to push the price higher than the 20-day EMA. This could lead to a pair of $575.
Solana (SOL), which was lower than the 20-day EMA ($178), on Jan. 2, indicated that bears are selling at every minor rally. The bears will attempt to lower the price below $167.88, which is a strong support.
Daily chart of SOL/USDT Source: TradingView
The SOL/USDT pair may drop to $148.04, if they succeed, which could be a strong support. If this level is not reached, it will signal that demand has dried up at higher levels.
This could increase the selling pressure and lead to a drop in the pair below $120. To signal that selling pressure is decreasing, the bulls will need to keep the price above the moving Averages. The price could rally to $204.75.
Cardano (ADA), has traded between the 20-day EMA ($1.36) and $1.28 on both the upside and the downside. This is a minor plus as it indicates that bulls aren’t willing to give ground to the bears.
Daily chart ADA/USDT Source: TradingView
The 20-day EMA has slowed down and the RSI is at 46. This suggests that selling pressure may be decreasing. Bulls pushing the price higher than the moving averages could cause the ADA/USDT pairs to rise to $1.60, then to the resistance line.
If the price breaks or closes above the channel, it could signal that the downtrend is over. If the price falls below $1.18, this positive view will be invalidated. This could push the price below $1.18, which would be a major support.
The Ripple (XRP), which was down from the $20-day EMA ($0.86) Jan. 3, suggests that sentiment is still negative and traders are selling to support rallies.
Daily chart of XRP/USDT Source: TradingView
The Jan. 4 candlestick has a long tail that indicates strong buying in the $0.77-$0.75 support zone. For the next few days, the XRP/USDT currency pair could consolidate between $0.75 to the 20-day EMA.
If bulls break above the moving averages, it could open the way for a rally up to $1. The pair could move toward $1.41 if bulls can clear this hurdle. Alternativly, if the price falls below $0.75, it could fall to $0.60, and then to $0.50.
Terra’s LUNA token has fallen below the overhead resistance of $93.81 on January 3 and has now reached the 20-day EMA ($83). This indicates that bears are selling rallies.
Daily chart of LUNA/USDT Source: TradingView
Bears pulling the price below $81.11 could cause selling to intensify, as short-term traders might rush to the exit. The LUNA/USDT price could drop to $76.72 first, then fall to the 50-day SMA ($67).
Contrary to popular belief, if the price rebounds above $81.11, it will indicate that bulls continue buying on dips. The bulls will attempt to break the overhead barrier of $93.81 to push the pair to its all-time high of $103.60.
Related: Bitcoin monthly RSI at its lowest since September 2020, fresh ‘oversold’ signal
For the past few days, Polkadot has traded between the 20-day EMA ($28), and the overhead resistance of $31.49 over the past few trading sessions. The balance between supply/demand is evident in the RSI and the flat 20-day EMA just above the middlepoint.
Daily chart of DOT/USDT Source: TradingView
If the price breaks the $31.49-$32.78 resistance zone, it will signal that the balance is tilted in the favor of bulls. The DOT/USDT currency pair could then begin its upward march towards $40.
If the price falls below the 20-day EMA and the price continues to fall, the pair may extend its stay within the range of $31.49 and $22.66 for a few days. To signal the resumption, the bears must sink below $22.66 and maintain it there.
Avalanche (AVAX), which fell below the moving averages Jan. 4, indicates that bears are aggressively protecting the downtrend line. The RSI at the midpoint and the flat 20-day EMA ($107), both suggest a state where there is equilibrium between bulls and bears.
Daily chart of AVAX/USDT Source: TradingView
The bears will try to bring the AVAX/USDT price below $98 if the price holds below the moving averages. The pair could fall to $75.50 if they succeed.
Contrarily, if bulls push the price above the moving average, it could move to the downtrendline. Breaking and closing above this level could signal a change in trend. The pair could rise first to $128, then retest the record at $147.
Dogecoin (DOGE), has traded within a narrow range between the 20 day EMA ($.0.17) to $0.16 over the past few days. Both the bulls as well as the bears seem to be playing safe and not making large bets.
Daily chart of DOGE/USDT Source: TradingView
Sharp moves are often followed by tight ranges. The RSI in negative zone and the moving averages that are downwardsloping suggest that the downside is the most likely path.
The bears will try to lower the DOGE/USDT price below $0.16 if the price falls below $0.15. It could lead to a drop to $0.13, and then to $0.10.
The other possibility is that the price rises from its current level and surpasses the 20-day EMA, then the pair could rally to $0.19 as the overhead resistance. To signal a change in trend, the bulls must clear this hurdle.
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.