Bitcoin (BTC) price has still not returned to the $ 40,000 level and traders expecting the uptrend to resume quickly may have been taken by surprise by the recent pullback. This could have led to a liquidation by accident BTC futures positions of $ 500 million in the last 24 hours.
Over-lever positions provide the necessary fuel during the uptrend but become a disadvantage when the trend reaches a turning point.
When the markets wear off, leveraged long positions quickly turn into losses, leading to margin calls from brokers. If the margin requirements are not met, brokers sell positions at the market price, resulting in a sharp decline.
So, Data suggesting a decline in Bitcoin’s leveraged positions in the past few days is a positive sign. as it reduces the risk of cascading settlements.
While a sharp dip is generally avoided if the markets are not leveraged, Sustainable purchases are required to maintain the highest level. If this does not happen, the price will gradually correct itself further.
Grayscale Investments has been a major taker in the past few months, but now it has a new entrant, Osprey Funds, which started trading on the OTC market on January 15th under the ticker symbol OBTC. The company offers a competitive management fee structure compared to grayscale.
This is a positive sign for the crypto markets because if both companies attract institutional investors, buying can resume and Bitcoin can change direction to make new highs.
While bitcoin gets stuck in one area, some altcoins are extraordinarily powerful. Let’s study the charts of the top 5 cryptocurrencies that could be favored by bulls in the days to come.
BTC / USD
Bitcoin is currently consolidating in an upward trend. The price movement of the past few days has formed a symmetrical triangle that generally acts as a continuation pattern. The long, long tail of today’s candle shows that the bulls are buying on a decline from the 20-day exponential moving average ($ 34.241).
Rising moving averages and the RSI in positive territory suggest that the bulls are in control. If buyers manage to push the price above the triangle, the next part of the uptrend could begin.
The first stop could be the current all-time high at $ 41,959.63, but if the bulls can push the price above it, the BTC / USD pair could rebound towards the target of the pattern at $ 50,000.
Contrary to this assumption, the bears can try to bring the price below the triangle if the jump doesn’t find buyers at the higher levels. If they have their way, the pair may plunge to the 38.2% fib retracement level at $ 29,688.10.
This level may attract buyers, but unless the bulls push the price above the 20-day EMA, the correction could deepen to the 50-day SMA ($ 26.581).
The 4 hour chart shows that the bulls bought while diving into the support line of the symmetrical triangle may face resistance on the downward sloping moving averages.
If the price falls below the moving average, the bears will try to bring the price below the triangle. If they are successful, a deeper correction is likely to occur.
Conversely, if the bulls can push the price above the moving averages, the pair can move up to the resistance line of the symmetrical triangle. The breakout of this resistance can trigger the uptrend.
However, if the price deviates from the resistance line of the triangle, the pair can still trade within the triangle for a few more days.
LINK / USD
Chainlink (LINK) broke the resistance at $ 20.1111 on Jan 15 and followed with another uptrend on Jan 16, hitting a new all-time high of $ 22.96. However, the long wick of the January 16 candle suggests a retained earnings at higher levels.
The price rallied from the breakout level of $ 20.1111 earlier today, suggesting that the bulls have turned that level into support. If the bulls can now price above $ 23, the LINK / USD pair could rise to $ 27 and later to $ 30.
The rise in the 20-day EMA ($ 16.25) and the RSI near the overbought zone suggest the bulls are at the top.
Contrary to this assumption, if the price drops below $ 20.1111, the next stop should be at $ 17.7777. This is important support as any decline below it indicates a possible trend reversal.
The 4-hour chart shows that the breakout above $ 20.1111 had pushed the RSI deep into overbought territory, potentially attracting retained earnings from short-term traders.
The good news, however, is that the bulls have aggressively bought the 20-day EMA. If the bulls can hold the price above $ 21,5709, the pair can retest $ 22.96. A break above this resistance can resume the uptrend. The rising moving averages and the RSI in the positive zone suggest that the bulls have the upper hand.
This bullish view will be invalidated if the bears sink and hold the price below the 20-day EMA. Such a move could drag the price to $ 17.7777, indicating that momentum has subsided.
UNI / USD
Uniswap (UNI) is currently in an uptrend but is poised to sell above the $ 9 mark, as evidenced by the January 16 long wick and today’s candle. Unless the bulls are giving up much ground, it suggests that after the recent rally, traders are in no rush to take their profits and buy on the dips.
The rise in the 20-day EMA ($ 6.15) and the RSI in the overbought territory suggest that the bulls have the upper hand. If the UNI / USD pair is at $ 7.4725 above the 38.2% Fib retracement level, the bulls will seek to resume the uptrend.
If they can push the price above $ 9.3776, the rally could extend to $ 12.4597 and then to $ 15.
Contrary to this assumption If the bears cut the price below $ 7.4725, the pair may drop to the 20-day EMA. Typically, a deep correction indicates that momentum has diminished and this may lead to a few days of range action.
The 4-hour chart shows that the pair is currently consolidating after the sharp move higher. The bulls buy the jump to the $ 8 support and the bears sell above $ 9.
If the bulls can push the price above the overhead resistance between $ 9 and $ 9.3776, the uptrend could resume.
Conversely, if the bears pull the price below the 20-day EMA, the decline could extend to the 50-day SMA. Such a move could keep the pair in a limited range for a few days.
XTZ / USD
Tezos (XTZ) has been stuck in the $ 2.85-1.85 range for the past few weeks. Currently the bulls are trying to push the price above the range and initiate a new uptrend.
However, The long wick of the January 16 candle shows that bulls are having a hard time keeping the price above the range. Today, the long wick and tail on the candle indicate indecision between bulls and bears.
If the bulls can hold the price above $ 2.85, the chance of a new uptrend increases. The rise in the 20-day EMA ($ 2.48) and the RSI above the 66 level suggest that the path of least resistance is on the upside.
The first target on the top is $ 3.90 and the next is $ 4.4936. This bullish view will be reversed if the XTZ / USD pair breaks below and below the 20-day EMA.
The 4-hour chart shows that the bulls pushed the price above $ 2.85 but failed to harness the force, which resulted in a correction. However, the bulls aggressively bought the jump into the 20-day EMA and are now trying to push the price above $ 3.1838. If they are successful, the upward trend could continue.
Conversely, if price falls from current levels or above resistance and falls below the 20-day EMA, it could correct to the 50-day SMA. A break below this support could indicate that the recent break above $ 2.85 was a bullish trap.
ATOM / USD
Cosmos (ATOM) broke strong resistance at $ 8,877 on Jan 16, setting a new all-time high of $ 9.60. Any time the price hits a new all-time high, it is a sign that the bulls are in command.
However, the bears have yet to give up as they have brought the price below $ 8,877 and are trying to catch the more aggressive bulls. Bullish momentum could weaken if the bears cut the price below the 61.8% fib retracement level at $ 7,093.
Conversely, if the bulls can defend the zone between the 38.2% retracement level at $ 8.05 and the 50% retracement level at $ 7,572, it indicates strong demand at the lower levels.
If the price rises out of this support zone, the bulls will attempt to resume the uptrend. A break above $ 9.60 could push the ATOM / USD pair to $ 12.10 and then to $ 13,974.
Both moving averages are rising and the RSI is in positive territory, indicating that the bulls have the upper hand. The pair rebounded from the 20-day EMA and the bulls will now seek to push the price above the overhead resistance of $ 8,877.
If successful, the pair could rise to $ 9.60 and a break above it signals the resumption of the uptrend. Conversely, if the bears pull the price below the 20-day EMA, it suggests that momentum is weakening and a decline to $ 7.50 and then the 50-day SMA is possible.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and business move is associated with risks. You must do your own research when making a decision.