Bitcoin (BTC) is struggling to maintain price levels at the current decline, indicating a lack of demand at the higher levels. Does this mean the bull cycle is over and institutional investors are leaving the cryptocurrency market?
Not! Quite the opposite. Glassnode’s weekly newsletter noted that Grayscale’s Bitcoin Trust (GBTC) premium was rising, suggesting that institutional investors are piling up at lower levels.
GBTC is not alone, another popular tool for institutional investors. Canada’s publicly traded fund Purpose Bitcoin also saw large capital inflows. According to analysts at Glassnode, this shows “the first signs of renewed institutional interest”.
Another metric that may indicate a possible low in Bitcoin is the dominance chart, which is similar to the first half of 2017. If Bitcoin’s dominance follows a similar course to 2017, it suggests that Bitcoin is still some distance from its cap and that Altcoin season still has room to rise.
Now that the monthly expiration of options and futures is out of the way, investors are likely wondering whether Bitcoin could start a strong rally next week, and which altcoins will rally if it does.
Let’s take a look at 5 cryptocurrencies that could be trending this week.
BTC / USDT
Bitcoin’s brief breakout failed to break the 200-day SMA ($ 41,014) hurdle on May 26th and 27th, indicating that bears are aggressively defending this level. The downward 20-day exponential moving average ($ 41,327) and relative strength index (RSI) near the oversold zone suggest the bears are in control.
If the BTC / USDT pair does not respect the support at USD 33,000, the next stop could be the support zone between USD 30,000 and USD 28,000. If that zone also fails, the pair may panic selling and drop to $ 20,000.
The longer the price stays below the 200-day SMA, the more difficult it will be for the bulls to begin the next phase of the uptrend.
However, if the price rises from current levels and goes above the 200-day SMA, it indicates a lot of buying at the lower levels. This could pave the way for a possible rally to the 61.8% fib retracement level at $ 48,231.
The 4 Hour Chart shows the formation of a symmetrical triangle, which generally acts as a continuation pattern. If the bears cut the price below the triangle, the pair could fall to $ 30,000 and then to the target of the pattern of $ 20,316.
On the other hand, this setup can act as a reversal pattern if the bulls push and hold the price above the resistance line of the triangle. Such a move suggests that the downtrend is over and the pair may hit the target of $ 51.951.
MATIC / USDT
Polygon (MATIC) rebounded from the 20-day EMA ($ 1.58) today, indicating that the bulls are buying on dips to that support. The 20-day EMA decline and the RSI in positive territory show that the path of least resistance is on the upside.
However, the MATIC / USDT pair has formed a symmetrical triangle pattern that signals indecision between the bulls and the bears. If the bulls push the price above the resistance line of the triangle, the pair could rise to $ 2.70 and then begin its journey towards the target of the pattern at $ 4.20.
Contrary to this assumption, if the price falls off the resistance line of the triangle, the pair could extend its stay within the triangle. A breakout and a close below the triangle suggest weakness and could pull it back to $ 0.80.
The 4 hour chart shows that the easing is facing resistance on the downtrendline. If the bears pull the price below the $ 1.51 support, the pair will complete a bearish head and shoulders pattern that could lower to $ 0.68.
Conversely, if buyers manage to push the price above the downtrendline, the upside momentum could rebound and the pair could find resistance at $ 2.43. A break above this level could trigger a rally to $ 2.70.
EOS / USDT
EOS attempted a rebound which failed on May 27th on a 38.2% fib retracement level at $ 7.89. The good news, however, is that the bulls did not allow the price to drop below the $ 5.60 support. This indicates that traders are not waiting for a deeper drop to buy.
If the bulls can push the price above the 20-day EMA ($ 6.95) and close, it would mean supply is exceeding demand. This could open the doors for a rally to the 50% retracement level at $ 9.23 and then to the 61.8% retracement level at $ 10.57.
This bullish view will be invalidated if the bears stop the next pullback attempt at the 20-day EMA, or $ 7.89. Such a move increases the likelihood of a breakout below $ 5.60. If so, the EOS / USDT pair could fall to the 200-day SMA ($ 4.52) and then to $ 3.57.
The 4-hour chart shows that the bulls are defending support at $ 5.60, indicating that selling pressures have eased. The flat 20-day EMA and the RSI just below the midpoint suggest a balance between supply and demand.
If the bulls push the price above $ 6.81, the pair could rebound to the 200-day SMA and then to $ 8.69. A breakout and a close above this resistance indicate that the bulls are back in the game. Alternatively, if the bears cut the price below the $ 5.60-5 support zone, the pair could drop to $ 3.57.
XMR / USDT
Repeated attempts by the bears to bring Monero (XMR) below the 200-day SMA ($ 222) have failed in the past few days. This suggests that the bulls are piling up at current levels.
Buyers attempted to push the price above the 20-day EMA ($ 294) on May 29, but the long wick in the candle shows strong sales at the higher levels. However, the bulls are likely to try again to break the 20-day EMA hurdle.
If successful, the XMR / USDT pair could start a relief rally that can hit the 61.8% fib retracement level at $ 368.45. This level can act as stiff resistance as traders who bought at higher levels can close out their positions.
That positive sentiment will be reversed if price reverses direction and falls below the 200-day SMA. In such a case, the pair can drop to $ 175 and then to $ 124.69.
The 4 hour chart shows the symmetrical triangle formation, which shows the indecision between the bulls and the bears about the next trend move. The flat 20-day EMA and the RSI near the midpoint also suggest a balance between supply and demand.
This advantage will work in favor of the bulls if they can push and hold the price above the triangle. The price could climb to the 200-day SMA, which could act as a stiff resistor.
Conversely, if the price goes down and falls below the triangle, the pair could drop to $ 175 and then to $ 124.69.
AAVE / USDT
AAVE is trying to bounce back from the support at USD 280. The price has not closed below this level since Jan 26th so the bulls are likely to be aggressively defending it. The 200-day SMA ($ 290) just above the level is an added bonus.
The downstream 20-day EMA (USD 398) and RSI below 43 suggest that the short-term trend is favoring the bears. Sellers will try to stop any recovery move at the 20-day EMA. If they find their way, the AAVE / USDT pair may correct back to $ 280.
A breakout and close below this support could trigger a downtrend and the decline could extend to $ 160. Conversely, the pair could rise to $ 489 if the bulls push the price above the 20-day EMA, which is likely to act as stiff resistance.
The 4-hour chart shows that the bulls bought the break to the USD 280 level. The 20-day EMA is flattening out, indicating that selling pressures are easing. If buyers push and hold the price above the downtrendline, the pair could rise to $ 418. A breakout and close above this resistance could rally towards USD 480.
This positive view will be invalidated if the price deviates from the 20-day EMA or downtrend line and falls below $ 280. If so, the bears will try to pull the price below the May 23rd low at $ 208.09 and it will start a new bearish trend.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade movement is associated with risks. You must do your own research when making a decision.