U.S. equity markets are on track to end the week in the red, but this has not led to deeper losses for Bitcoin (BTC). The news of the bankruptcy of cryptocurrency lender Genesis also did not have a significant impact on the price of bitcoin. This shows that selling pressure may ease.
However, trading firm QCP Capital warned in the latest edition of its regular markets newsletter that bitcoin’s current recovery was just a bear market rally. They expect this recovery to be followed by another surge of selling that could push the price of Bitcoin and Ether (ETH) below their 2022 lows. QCP used Elliott Wave analysis to come to this conclusion.
Daily indicators of the cryptocurrency market. Source: Coin360
After an extended bear phase, price action always climbs the wall of worry in the early days of a new bull market. At the time, some analysts are still in disbelief as they continue to expect the price to go down, but traders can pick up a trend change if they watch higher highs and higher lows form.
Are Bitcoin and some altcoins showing signs of a bottom? Let’s examine the charts of the top 10 cryptocurrencies to find out.
Bitcoin price has been trading in a tight range of $20,400 to $21,650 over the past few days. Usually, tight consolidation near hard resistance is a positive sign, as it shows that traders are in no hurry to take profits.
BTC/USDT daily chart. Source: Trading View
Rising moving averages and the Relative Strength Index (RSI) in the overbought zone indicate that the path of least resistance is up. Buyers will have to maintain the price above $21,650 to signal a resumption of upside movement. The BTC/USDT pair could then move towards $25,211.
Conversely, if the bears do not allow the price to rise above $21,650, some traders who may have bought at the lower levels may be tempted to take profits. Selling could intensify on a break below $20,400.
The next support on the downside is the 20-day exponential moving average ($19,268). If the price bounces off this support, the bulls will again try to break the upper barrier at $21,650, but if the 20-day EMA breaks, the correction could extend to $18,388.
Sellers attempted to initiate a deeper Ether correction, but on January 18, the bulls bought a dip around $1,500. This shows that the bulls are buying on minor pullbacks.
Daily ETH/USDT chart. Source: Trading View
The bulls will try to push the price above the upper resistance zone between $1610 and $1680. If they succeed, the ETH/USDT pair could rise to $1,800. This level may again become a barrier, but if the bulls break it, the pair could reach $2,000.
If the bears want to dampen the momentum, they will have to defend the upper zone and push the price below $1,500. The pair could then slide towards the 20-day EMA ($1,428), which could attract buyers.
BNB (BNB) bounced off the 20-day EMA of $281 on January 19, but bulls are struggling to maintain momentum as higher levels attract sellers.
BNB/USDT daily chart. Source: Trading View
The area between the 20-day EMA and the 50-day SMA ($268) is important to keep an eye on because if the price reverses from it, the bulls will again try to push the BNB/USDT pair above $318. If they do, the pair will complete the bullish inverted head and shoulders pattern.
On the other hand, if the price continues to decline and breaks through the moving averages, this could clear the way for a possible drop to $240 and then to $220.
XRP (XRP) found support on the moving averages on January 18 and reversed on January 19. This indicates strong buying on the 20-day EMA ($0.37).
Daily XRP/USDT chart. Source: Trading View
Buyers will try to keep the pace and push the price towards the upper resistance at $0.42. This is a key level that the bears need to defend because if it is breached, the XRP/USDT pair could rise to $0.51 as there is no major hurdle in between.
The bears most likely have other plans as they will try to drag the price below the moving averages again. If they succeed, the pair could drop sharply towards the support line, where buying could come in.
Cardano (ADA) rallied from the flag pattern support line on January 19, which is a positive sign. Buyers will try to push the price above the flag to signal the start of the next leg of the move up.
Daily ADA/USDT chart. Source: Trading View
On a break above the flag, the bears could set up strong protection at $0.37, but if the bulls break this barrier, the ADA/USDT pair could soar to $0.44. This level may again be a stumbling block for the bulls.
This positive view may not be valid in the near future if the price reverses and falls below the mark. This could attract further selling from short-term traders and the pair could drop to the 50-day SMA ($0.29).
Buyers tried to take Dogecoin (DOGE) above $0.09 on January 18, but the bears defended this level aggressively, as seen in the long wick on the daily candle.
Daily DOGE/USDT chart. Source: Trading View
Bulls held the 20-day EMA support ($0.08) on the decline, but the weak bounce on January 19 and 20 indicates aggressive buying hesitation. This may cheer up the bears who will try to push the DOGE/USDT pair below the 20-day EMA.
If they do, the pair could drop to strong support around $0.07. The flattening of the 20-day EMA and the RSI slightly above the midpoint point to possible range movement in the short term.
If the bulls want to maintain their lead, they will have to break the $0.09 barrier. The pair could then start heading north to $0.11.
Polygon (MATIC) is trading in a wide range from $0.69 to $1.05. Typically, in an established range, traders buy near support and sell near resistance.
Daily MATIC/USDT chart. Source: Trading View
This is exactly what happened to the MATIC/USDT pair, which turned down from the upper resistance at $1.05. The first support line is at the 20-day EMA ($0.90). Buyers held this level on January 19, but they will need to push the price above $1.05 to start a new upward move.
Alternatively, if the price breaks below the 20-day EMA, this would mean that the pair could extend its stay inside the range for a few more days. The near-term advantage could tip in favor of the bears on a break below the 50-day SMA ($0.86).
Related: Bitcoin sees $21.4k zone as analyst predicts BTC price to chase gold
Litecoin (LTC) rebounded from the 20-day EMA ($81) on January 19, indicating that the bulls are seeing the fall as a buying opportunity.
Daily LTC/USDT chart. Source: Trading View
The bulls will try to push the price up to $91 where they could face strong resistance from the bears. If the bulls break above $91, LTC/USDT could accelerate to the psychologically important $100 and then $107.
Another possibility is that the bounce will fade and not rise above $91. This could increase the likelihood of a break below the 20-day EMA. The pair could then crash to the $75 breakout level.
Polkadot (DOT) continues to see a swing near the downtrend line. This indicates that the lower levels are attracting buyers, but the bears are selling on the rally.
DOT/USDT daily chart. Source: Trading View
The rising 20-day EMA ($5.34) and the RSI in positive territory suggest that uncertainty may resolve in favor of the bulls. Buyers will have to raise the price above $6.53 to take responsibility. If they succeed, DOT/USDT could soar to $7.42 and then to $8.05.
Contrary to this assumption, if the price turns down and falls below the 20-day EMA, this would mean that the bears have outperformed the bulls. This could push the price down to the 50-day SMA ($5).
Avalanche (AVAX) turned down from the resistance line on January 14, but the bears failed to pull the price up to the 20-day EMA ($14.72). This suggests that sellers may lose control.
AVAX/USDT daily chart. Source: Trading View
Buyers will make another attempt to drive the price above the resistance line. If they succeed, AVAX/USDT could gain momentum and rise to $22 and then to $24. The rising 20-day EMA and RSI near the overbought zone indicate the advantage of buyers.
This positive view could be refuted in the short term if the price turns lower and falls below the 20-day EMA. This could trigger further selling and then the pair could continue lowering to the 50-day SMA ($13.09).
The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of .
This article does not contain investment advice or recommendations. Every investment and trading step involves risk, and readers should do their own research when making a decision.