Bitcoin (BTC) has finally surpassed $17,000 after rallying to $17,375 on Jan. 12, with both bulls and bears eyeing the Consumer Price Index (CPI) due Jan. 12. If prints show inflation cooling, risk assets could recover, but a downside surprise could result in strong selling.
While some believe Bitcoin could form a macro bottom, others remain skeptical. They draw a parallel between the current bear market and the bursting of the dot-com bubble. The United States Federal Reserve stopped raising interest rates in May 2000, but the Nasdaq never bottomed for two more years. If the same scenario plays out with cryptocurrencies, the next bull run may not start anytime soon.
Daily crypto market data view. Source: Coin360
However, a positive for the future of the crypto industry is that legacy financial companies continue to show interest in the space. Laser Digital co-founder and CEO Jez Mohideen believes that the arrival of traditional companies could help regulate the cryptocurrency sector.
Are the Charts Signaling a Rally in Bitcoin? What other altcoins have a positive chart structure? let’s find out
BTC/USDT
Bitcoin has been trading above the moving averages since January 4th. This is the first indication that selling pressure may be easing. The price hit the overhead resistance at $17,061 on Jan. 6, but the bulls failed to scale this level. This suggests that the bears have not given up just yet.
BTC/USDT daily chart. Source: TradingView
A small advantage in the bulls’ favor is that they did not let the BTC/USDT pair fall below the moving averages. If the price consolidates between the moving averages and $17,061 for some time, the prospects of a break above the overhead resistance might improve. If the bulls push the price above $17,061, the pair could rally towards $18,388.
Alternatively, if the price turns lower and falls below the moving averages, it will suggest that the pair could remain stuck between $17,061 and $16,256 for a few more days.
BTC/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows the bears guarding the $17,061 level, but they failed to sink the price below the 20-exponential moving average. This suggests that buyers are not rushing for the exit as they anticipate a break above the overhead resistance.
The gradual rising 20-EMA and the Relative Strength Index (RSI) in positive territory suggest that buyers have a slight advantage. A break above $17,061 could signal the start of a new upward move in the short-term.
If the bears want to regain control, they need to sink the price below the 50 simple moving average. The pair could then drop to $16,600 and remain range bound for a while longer.
SOL/USDT
Solana (SOL) has been a major underperformer for the past few months, but the price action of the past few days raises the possibility of an eventual recovery rally. It’s too early to predict whether the expected movement is a dead cat’s bounce or the start of a sustained recovery. However, the setup could be interesting for short-term traders.
SOL/USDT daily chart. Source: TradingView
The SOL/USDT pair has rallied strongly since the December 29th low of $8. Buyers propelled the price above the 50-day SMA ($12.75) on Jan. 3 and have managed to sustain the pair above this level ever since. This suggests that the bulls are trying to turn the moving averages towards support.
If the price breaks the overhead resistance at $15, the pair could accelerate towards $19. This level could act as a barrier again, but if breached the rally could extend to the 50% Fibonacci retracement level of $23.40.
The bulls could lose their footing if the price turns down and breaks below the moving averages. Such movement indicates that bears are active at higher levels.
SOL/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the price has fallen back to the 20-EMA, but the bulls have bought this decline. This indicates a switch in sentiment from selling on rallies to buying on dips. The bulls will attempt to extend the upward move by propelling the price above the $14.24-$15 resistance zone.
On the other hand, the bears will attempt to pull the price below the 20-EMA. If they succeed, the pair could drop to the 50-SMA. This level can act as support, but if bears sink the price below it, the drop could extend to $11.
XMR/USDT
Monero (XMR) broke out of the falling wedge pattern on Jan 5 and buyers managed to sustain the price above the breakout level for three days. This indicates a possible trend reversal.
XMR/USDT daily chart. Source: TradingView
The moving averages have turned up and the RSI is in positive territory, indicating that the buyers have the upper hand. There is a minor resistance at $162 and then again at $167 but both levels are likely to be breached.
The XMR/USDT pair could then reach the overhead resistance at $174. This level can be a major obstacle, but if the bulls manage to clear it, the pair could rally to $200.
If, contrary to this assumption, the price turns down and falls below the moving averages, it will indicate that the wedge breakout may have been a bull trap. Downside momentum might increase on a break below $138.
XMR/USDT 4 hour chart. Source: TradingView
The 4-hour chart shows that the bears are attempting to form a short-term double top pattern near $160. The sellers have dragged the price below the 20-EMA, which opens the doors for a potential drop to the 50-SMA. The bulls may be fiercely protecting the moving averages as a break below it could tip the advantage in the bears’ favor.
If the price increases from the current level, it suggests that lower levels will attract buyers. The pair could then rally again to the overhead resistance at $160. If this resistance is broken, the upward movement could resume.
Related: Digital Currency Group under investigation by US authorities: report
LDO/USDT
Lido DAO (LDO) broke out of the downtrend line on January 1st and moved significantly higher. This suggests that the downtrend may be over.
LDO/USDT daily chart. Source: TradingView
The moving averages have completed a bullish crossover, suggesting that the buyers have the upper hand, but the RSI’s overbought levels are suggesting a near-term correction or consolidation.
If the buyers don’t lose much ground from the current levels, the LDO/USDT pair could reach the overhead resistance at $1.85. This level could act as a strong barrier again, but if bulls scale it, the pair could reach $2.30.
The first sign of weakness will be a break below the 20-day EMA ($1.21). Such a move suggests that bears are selling on rallies.
LDO/USDT 4 hour chart. Source: TradingView
The 4 hour chart shows that the pair has started an uptrend. The rising moving averages and the RSI in the overbought territory indicate that the bulls are in control. There is a minor resistance at $1.71 but if crossed the rally could reach $1.85.
The 20-EMA has acted as strong support during pullbacks, so this remains an important level to watch for in the short-term. If this support breaks, the pair could slide to the 50-SMA.
AAVE/USDT
Buyers successfully defended psychological support near $50 and are attempting to form a double bottom pattern. This is the reason for selecting Aave (AAVE).
AAVE/USDT daily chart. Source: TradingView
The bounce off the strong support at $50 has hit the 50-day SMA ($58). Both the moving averages have flattened out and the RSI has jumped into positive territory, indicating an advantage for buyers.
If the bulls push the price above the 50-day SMA, the AAVE/USDT pair could scale the downtrend line and $67 thereafter. A break and close above this level will complete a double bottom that has a pattern target of $84.
This optimistic view will be invalidated if the price turns down and breaks below the key $50 support.
AAVE/USDT 4 hour chart. Source: TradingView
The bulls are attempting to push and hold the price above the immediate overhead resistance near $58. If they succeed, the pair could rally to the downtrend line. This level can act as a strong hurdle, but on the way down it might increase the likelihood of a break above the downtrend line if bulls flip the $58 level into support.
The first support to watch on the downside is the 20-EMA. If this level gives way, the pair could drop to $54. This is an important level for the bulls to defend if they are to keep the short-term momentum in their favor.
The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
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