Bitcoin (BTC) rose more than 11% last week and is trading near the pivotal resistance at $25,000. Monitoring resource Material Indicators highlighted in its latest update that large volume traders were “thinning” overhead resistance, which could spark a rally. As the prices rise, retail traders may get sucked in and the whales could use this opportunity to sell their positions that were accumulated at lower levels.
Every uptrend witnesses several pullbacks and Bitcoin is no exception. However, the price action of the past several months shows a large basing pattern, which may be about to break out to the upside. If that happens, Bitcoin will signal a potential trend change.
Daily cryptocurrency market performance. Source: Coin360
There are very few occasions when all the indicators turn bullish. If traders keep waiting for that to happen, they may miss a large portion of the rally. Therefore, it is better to watch the price action closely and trade according to the individual’s money management principles. Usually, successful strategies are simple and easy to follow.
Could Bitcoin and select altcoins continue to outperform the United States equities markets in the near term? Let’s study the charts to find out.
The S&P 500 index (SPX) bounced off the 20-day exponential moving average (4,080) on Feb. 10 but the bulls could not push the price to the overhead resistance at 4,200. This emboldened the bears who pulled the price below the 20-day EMA on Feb. 17. A minor positive for the bulls is that lower levels attracted strong buying as seen from the long tail on the day’s candlestick.
SPX daily chart. Source: TradingView
The 20-day EMA is flattening out and the relative strength index (RSI) is near the midpoint, suggesting a few days of consolidation. The index could swing between the uptrend line and 4,200 for some time.
Trading inside a range is generally volatile and random. If bulls thrust the price above 4,200, the index could resume its up-move. There is resistance at 4,300 but if bulls do not allow the price to dip back below 4,200 during the next correction, the index may rally to 4,500.
Contrary to this assumption, if the price turns down and plummets below the uptrend line, the index may tumble to 3,764.
The U.S. dollar index (DXY) broke and closed above the wedge pattern on Feb. 16. The moving averages are about to complete a bullish crossover and the RSI is near 57, indicating that bulls are trying to make a comeback.
DXY daily chart. Source: TradingView
However, the bears are unlikely to give up easily. They will try to pull the price back below the moving averages and trap the aggressive bulls. If they do that, the index could first slip to 102.58 and thereafter to 101.29.
Conversely, if bulls do not allow the price to break below the moving averages, it will suggest that dips are being purchased. The index may then start a relief rally to the 38.2% Fibonacci retracement level of 105.52 and thereafter to the 50% retracement level of 106.98.
Bitcoin has been trading near the strong overhead resistance at $25,211 for the past four days. Although the bears have defended the level successfully, the bulls have not given up. They again jumped on the opportunity on Feb. 20 and purchased at lower levels.
BTC/USDT daily chart. Source: TradingView
Generally, a consolidation near a strong overhead resistance breaks out to the upside. The rising moving averages and the RSI above 65 also indicate that bulls are in control. If the price breaks and sustains above $25,250, the BTC/USDT pair could pick up momentum. There is no major resistance until $31,000, hence this journey could be covered in a short time.
The first support is at the 20-day EMA ($23,218) and then at $22,800. Sellers will have to quickly drag the price below this support to weaken the bullish momentum. The pair could then tumble to $21,480.
Buyers pushed Ether (ETH) above the overhead resistance of $1,680 on Feb. 17 and thwarted attempts by the bears to pull the price back below the breakout level.
ETH/USDT daily chart. Source: TradingView
The upsloping moving averages and the RSI in the positive zone indicate that the path of least resistance is to the upside. The ETH/USDT pair could first rise to $1,800 and then continue its journey toward the next resistance at $2,000. Sellers are expected to fiercely defend the zone between $2,000 and $2,200.
This bullish view could invalidate in the near term if the price turns down from the current level and breaks below $1.460. The pair may then slump to the strong support at $1,352.
Sellers are trying to defend the $318 resistance but the bulls have not allowed BNB’s (BNB) price to sustain below the moving averages. This suggests that lower levels are attracting buyers.
BNB/USDT daily chart. Source: TradingView
The price has been clinging to the $318 resistance for the past two days, increasing the possibility of a break above it.
If that happens, the BNB/USDT pair could rally to the neckline of the inverse head and shoulders (H&S) pattern where the bears may again erect a strong barrier. If buyers bulldoze their way through, the pair could jump up to $360 and thereafter continue its journey to $400.
The bears will have to sink and sustain the price below the 50-day SMA ($300) to keep their chances alive for starting a deep correction.
XRP’s (XRP) price has been falling in a descending channel pattern. The 20-day EMA ($0.39) is flattish but the RSI has risen above 54, indicating that bulls are trying to start a recovery.
XRP/USDT daily chart. Source: TradingView
If the price ascends and sustains above the resistance line of the channel, the XRP/USDT pair may start a rally to the crucial overhead level of $0.43. A break and close above this level could open the gates for a possible spurt to $0.51.
Contrarily, if the price turns down from the current level and sustains below the moving averages, it will suggest that bears are not willing to give up without a fight. The pair could first slide to $0.36 and then to the support line of the channel.
Cardano (ADA) is getting squeezed between the neckline and the 20-day EMA ($0.38). This tight range trading suggests that bulls are buying the dips to the 20-day EMA as they anticipate a move higher.
ADA/USDT daily chart. Source: TradingView
The upsloping moving averages and the RSI in the positive territory indicate that bulls have the upper hand. A break and close above $0.42 will complete a bullish inverse H&S pattern. This setup could attract further buying and push the price toward $0.50. The target objective of this reversal pattern is $0.60.
Alternatively, if the price turns down and breaks below the 20-day EMA, it will give an opportunity to the bears to make a comeback. The pair could then slide to the strong support at $0.34.
Related: Ethereum’s deflation accelerates as Shanghai upgrade looms – Can ETH price avoid a 30% drop?
Polygon (MATIC) is in a strong uptrend. The bears tried to stall the up-move near $1.57 but the shallow pullback suggests that bulls are not rushing to the exit.
MATIC/USDT daily chart. Source: TradingView
If the price turns up from the current level and rises above $1.57, the uptrend may resume. The MATIC/USDT pair could then rally to $1.70. This level is likely to act as a major obstacle but if bulls kick the price above it, the pair could continue its northward march and reach $2.10.
The first major support on the downside is the 20-day EMA. Sellers will have to tug the price below this support to slow down the bullish momentum. The pair could then start a deeper correction to $1.13.
The bulls and the bears are witnessing a tough battle near the moving averages. A minor positive is that buyers have not allowed Dogecoin (DOGE) to sustain below the 50-day SMA ($0.08), indicating demand at lower levels.
DOGE/USDT daily chart. Source: TradingView
The 20-day EMA ($0.09) has started to turn up gradually and the RSI is just above the midpoint, signaling that bulls have a slight edge. If buyers drive and sustain the price above $0.09, the DOGE/USDT pair could rally to $0.10 and thereafter to $0.11. This level may act as a significant resistance but if crossed, the next stop could be $0.15.
On the downside, the $0.08 level is acting as a strong support. Any breach of this level could result in a retest of the crucial support at $0.07.
The resistance line in Solana (SOL) acted as a major obstacle on three previous occasions, hence a break and close above it will be the first indication that the downtrend could be ending.
SOL/USDT daily chart. Source: TradingView
If the price sustains above the resistance line, the SOL/USDT pair could rally to $39 where the bears may again mount a strong defense. If bulls flip the resistance line into support during the next pullback, the likelihood of the pair hitting $50 increases.
Time is running out for the bears. If they want to regain the advantage, they will have to quickly stall the up-move and yank the price back below the support at $19.50. If they do that, the pair may plummet to $15.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.