Cryptocurrency markets have made a strong comeback over the past few days. That brought the total crypto market capitalization to $995 billion on Jan. 14, according to CoinMarketCap data. Bitcoin (BTC) led the recovery from the front, breaking above $21,000 on January 14.
After the sharp rally, the big question is whether the recovery is a dead cat bounce, a selling opportunity, or the start of a new uptrend. It is difficult to predict definitively whether a macro bottom has been formed, but the charts suggest that a downward process has begun.
Independent market analyst HornHairs highlighted that the bear market lasted 364 days from 2017 to 2018, and from 2021 to the current market low, the duration is again 364 days. Another interesting similarity is that the 2015 to 2017 bull market and the 2018 to 2021 bull run both lasted 1,064 days. If history repeats itself, Bitcoin could reach its next peak in about 1,000 days.
Bitcoin’s short-term price action has been exciting for the bulls, but are there any altcoins showing similar strength in the near term?
Let’s examine the charts to find out.
BTC/USDT:
Bitcoin reached as high as $21,258 on January 13, pushing the Relative Strength Index (RSI) above 89, signaling that the rally is overheated in the short term. Bears are expected to form a strong defense at $21,500.
Sometimes, when a trend reversal occurs, the RSI can stay in overbought territory for a long time. If the BTC/USDT pair does not give up much ground from current levels, it suggests that traders are not in a rush to take profits as they expect another leg higher.
If buyers buy above $21,500, the pair could rise to $22,800. This level can again act as a major obstacle.
On the way down, the bears will have to drag the price below the psychological level of $20,000 to capture the upside momentum. The pair could then drop to the breakout level of $18,388.
The 4-hour chart shows the bears holding the $21,250 level, but a positive sign is that the bulls have not allowed the price to drop back below $20,000. Buyers can try again to break the upper barrier of $21,258 and resume the uptrend.
Conversely, if the price breaks below $21,250 again, it could tempt short-term traders to take profits. This could sink the pair below the 20-EMA. Bears may try to exploit this situation and drag the pair to $18,388.
LTC/USDT:
Litecoin (LTC) broke above the overhead resistance at $85 on January 12, indicating the start of a new uptrend. There is no major barrier until the price reaches $107.
On the downside, bulls will try to aggressively defend the zone from $85 to the 20-day EMA ($79). If the price returns from this zone, the LTC/USDT pair may continue its uptrend and reach $107.
The slope of the moving averages indicates a bullish advantage, but an RSI above 77 suggests a minor pullback or consolidation is likely.
If the bears want to gain an advantage, they will have to lower the price below the $75 breakout level. That could pave the way for a break down to $61.
The 4-hour chart shows that the pair is in an uptrend and the bulls are fiercely defending the 20-EMA. If buyers buy above $92, the pair could gather momentum and reach the psychological level of $100.
Conversely, if the price breaks down and breaks below the 20-EMA, this would suggest that short-term traders can book profits. This could bring the price to the 50-SMA. This is an important defensive level for the bulls, as a break below it could increase the risk of a decline to $80 and then $75.
OKB / USDT
While several cryptocurrencies are trying to bottom out, OKB (OKB) has started a new uptrend. Usually, a good strategy is to buy the dips in the uptrend while maintaining an appropriate stop loss.
The slope of the moving averages and the RSI in overbought territory indicate that the bulls are in charge, but a short-term consolidation or correction cannot be ruled out. The OKB/USDT pair may slide up to the 20-day EMA ($27.64), which is likely to act as a strong support.
If the price drops below this level, the pair may touch the strong aerial barrier of $34.18. Breaking this level may be a difficult task, but if the bulls manage to achieve it, the pair could rise to $42.
If the bears want to stop the upward movement, they will have to lower the price below the 20-day EMA. If it succeeds, the pair could see a sharp decline towards the 50-day SMA ($24.05).
The 4-hour chart shows that the uptrend has been met with strong selling near $33 and the pair may be headed towards the 20-EMA. If the price retraces from this support, it suggests that the bulls are buying on every minor dip. That could push the price to $34.18.
Conversely, if the price falls below the 20-EMA, the correction may deepen to the 50-SMA. If the price breaks below this level, the bulls will again try to resume the upward move, but may face resistance at $31 and again near $33.
Related to: Bitcoin Fails to Convince $12K Bottom ‘Still Possible’
BIT/USDT:
BitDAO (BIT) surged from $0.26 on December 27th to $0.53 on January 14th, indicating strong bullish momentum. Additionally, the January 15 shallow pullback suggests that traders are in no rush to exit their positions as they expect the uptrend to continue.
If the bulls push the price above the overhead resistance at $0.54, the BIT/USDT pair could resume its uptrend. The next resistance to the upside is $0.68. Bears could pose a serious challenge at this level, as a break and close above it could open the door for a possible rally to $0.80.
On the downside, the first support is at $0.46, then the 20-day EMA ($0.42). A strong bounce of any support suggests that traders are buying on the dips. This may result in a retest of $0.54. Bears may take control if prices dip below the 20-day EMA.
The 4-hour chart shows the pair holding resistance near $0.54, but bulls are likely to defend the decline to the 20-EMA. A strong pullback from this level suggests that the bulls are going for shallow declines. That could improve prospects for a break above $0.54.
Alternatively, if the price breaks down and drops below the 20-EMA, a few short-term traders can take profits. It could pull the pair towards the 50-SMA. If this level is also broken, the pair may fall to $0.41.
FTM/USDT:
On January 9, Fantom (FTM) broke out of the bearish line, indicating a potential trend reversal. The breakout was followed by a sharp rally that pushed the RSI to deeply overbought levels.
Vertical rallies are volatile, so a pullback was expected. The FTM/USDT pair could drop to the 38.2% Fibonacci retracement level at $0.30 and then to $0.28, the 50% retracement level.
If the price rises above this zone, it will suggest a change in sentiment from rally selling to bearish. The bulls will then try to resume the recovery and take the pair above $0.36. If they do, the pair could rise to $0.42.
Conversely, a break and close below $0.28 could take the pair down to the 61.8% retracement level of $0.26. A deeper decline could break the bullish momentum and increase the likelihood of a range formation.
Both moving averages are trending down and the RSI is in positive territory, indicating an advantage for buyers. The pair may slide towards the 20-EMA, which is likely to act as a strong support. If the price falls below this level, the bulls will try to resume the upward move.
Conversely, if the price breaks below the 20-EMA, it would suggest that traders are aggressively taking profits after the recent rally. The pair can then extend its correction to the 50-SMA.
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 investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.
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