Bitcoin faces slight resistance near $ 50,000, but if this psychological barrier is crossed, a major breakout could occur in specific altcoins.
Supply and demand metrics determine the asset’s price, and data from Glassnode, a chain-linked data company, shows that the liquid supply of Bitcoin (BTC) has decreased since June 2020. This indicates that traders who own Bitcoin are not selling their holdings.
While supply is shrinking, demand has been rising in the past few months as an increasing number of institutional investors buy bitcoin.
Bloomberg recently reported that Morgan Stanley Investment Management’s Cointerpoint Global is “exploring whether cryptocurrency would be a suitable option for its investors.”
According to the Morgan Stanley website, Counterpoint Global is choosing to invest in assets “that can greatly increase their market value for fundamental fundamental reasons.” This indicates that the bank believes that Bitcoin may be undervalued compared to its fundamentals.
JPMorgan Chase also hinted that it might eventually offer Bitcoin services. Daniel Pinto, co-chair of JPMorgan, believes that if investors and asset managers start using Bitcoin, the bank will have to “get involved.” However, Pinto said the current demand is not strong enough, but acknowledged that it may grow in the future.
Although Bitcoin has risen sharply in the past few months, its dominance has decreased from around 69.71% on January 4 to 60.9% currently. This indicates that altcoins have outperformed Bitcoin in the past few weeks. Focusing on altcoins, let’s look at the charts of the top 5 cryptocurrencies that may be trending in the next few days.
Bitcoin / USD
Bitcoin broke above the $ 41,959.63 resistance level on Feb 8th with a strong bullish move, but since then, momentum has weakened. Although the price has been rising, the leading cryptocurrency is facing profit taking at choppy levels.
If the price falls below current levels and dips below $ 46,000, the correction may deepen to the strong support level at $ 41,959.63. If the BTC / USD bounces away from this support, it will indicate the bulls are continuing to build up on the dips, indicating that the upside is intact.
The bulls will then try to push the price above the psychological barrier of $ 50,000 and resume the uptrend with the next target at $ 60,974.43. On the other hand, if the price bears sink below the 20-day exponential moving average ($ 41,349), the pair might drop to the 50-day SMA ($ 36.070).
This is an important support to watch out for as the price has not dipped below the 50 day SMA since October 9th. Hence, a break below that would indicate a possible change in trend. Next support on the downside is much lower at $ 28,850.
The 4 hour chart shows that the pair has formed a rising wedge pattern that will complete upon breakdown and close below the support line. If that happens, the pair may fall to $ 43,720.85 and then to $ 41,959.63.
Contrary to this assumption, if the price rises above current or 20-EMA levels and rises above the wedge, it will invalidate the bearish setup. A breakout above $ 50,000 could attract short hedges from the bears and could lead to a rapid rally to $ 55,000.
BCH / USD
Bitcoin Cash (BCH) broke the $ 539 resistance level on Feb 12th and that’s what attracted buying from the bulls. The alternative currency picked up the momentum and rose above the $ 631.71 resistance level on February 13th
The long wick in the candlestick today indicates that short-term traders may book profits after the recent rally. The BCH / USD may now correct to $ 631.71, and if the bulls manage to turn this level into support, it would indicate buying on every slight dip.
If the bulls manage to push the price above $ 730.02, the uptrend might reach $ 900. Both moving averages are sloping up and the Relative Strength Index (RSI) is in the overbought zone, indicating an advantage for the bulls.
Contrary to this assumption, if the price falls and continues below $ 631.71, the correction may deepen to $ 539.
The 4-hour chart shows that the bears are defending the $ 720 resistance and the bulls are buying on dips to $ 650. If the buyers manage to push the price above $ 730.02, the uptrend can resume.
On the other hand, if the price drops again from $ 720, the bears will try to bring the price down to $ 631.71. If this support breaks, the decline may extend to the 20-EMA and then to the 50-SMA.
EOS / USD
EOS exited the long base formation and started a new uptrend when it surged above the $ 3.95 upper resistance on February 9th. The alt currency gained momentum and the bulls pushed the price above the $ 5.4861 resistance Feb 13th.
However, the failure to keep the price above $ 5.4861 may have attracted profit taking from traders in the short term. This has initiated a correction that could extend to the 38.2% Fibonacci retracement level at $ 4.5014.
If the price bounces away from this level, the bears will try again to push the price and keep it above the general resistance of $ 5.4861 and $ 5.6118. Contrary to this assumption, if the bears drop the price below $ 4.5014, the EOS / USD pair might drop to $ 3.95.
Such a deep correction would indicate that the momentum is weak and the pair could then consolidate in a broad range between $ 3.95 and $ 5.6118 for a few days.
The 4-hour chart shows that the bulls have bought the decline to the 20-EMA. If the pair maintains the bounce, the bulls will try to once again push the price above $ 5.6118. If they succeed, the uptrend could resume.
The next target on the upside is $ 6, and if this level is also measured, the uptrend might reach $ 7.50. On the other hand, a break below the 20-EMA could extend the correction to the 50-SMA.
XMR / USD
Monero (XMR) broke above the $ 190 resistance level on Feb 12th and resumed the uptrend. The 20 day moving average ($ 174) appeared and the RSI indicator has moved into the overbought territory, indicating that the bulls are in control.
Bears are currently defending the psychological level at $ 250. The first support on the downside is the 38.2% Fibonacci retracement at 213.6152. If the price bounces off this level, it will indicate that traders are viewing the dips as a buying opportunity.
A break above $ 254.45 would open doors for a rally to $ 300 as the bears may once again mount stiff resistance.
Contrary to this assumption, if the price bears sink below $ 213.6152, the correction could deepen to $ 190. This deep dip may delay the start of the next phase of the uptrend.
The 4 hours chart shows that the bears are defending the resistance zone of $ 240-254.45 but the positive sign is that the bulls have not given up a lot of ground. If the price rises from the current level or bounces off the 20-EMA, it will indicate strength.
If the bulls manage to push the price above general resistance, the price will likely go up to $ 268 and then $ 300. This bullish view will be invalidated if the XMR / USD pair falls and closes below the 20-EMA.
XTZ / USD
Tezos (XTZ) broke an all-time high of $ 4.4936 on Feb 12 and hit a new high of $ 5.6471 today. When an asset reaches a new high, this indicates that the bulls are in control.
Another thing that usually happens when a major resistance is broken is that the price drops and retest the breakout level. In this case, the price may fall to the breakout level of $ 4.4936.
If the price bounces off this level, it will indicate that traders are buying on dips and have turned previous resistance into support. The bulls will then try to resume the uptrend by pushing the price above $ 5.6471.
If they succeed, the XTZ / USD pair could rise to $ 7.1407. This bullish trend will be nullified if the pair breaks and continues below $ 4.4936.
The 4-hour chart shows that the bulls cannot maintain the price above $ 5.40, which may attract short-term profit taking from traders. The Bulls are currently trying to defend the 20-EMA.
If price bounces off this support, it will indicate strength. Break above $ 5.6471 may resume rally. On the other hand, if the price dips below the 20-EMA and supports $ 4.4936, the correction may deepen to the 50-SMA.
The opinions and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risks, you must do your research when making a decision.