Bitcoin’s winning streak of eight weeks is likely to come to an end as its price has decreased by almost 4% this week. While this dip can be attributed to profit-booking by traders, it does not signal a change in the short-term uptrend. The pullback in price will also help reduce any excessive speculation that may have been building up.
After this initial shakeout, strong investors are expected to re-enter the cryptocurrency market as the overall macro environment remains positive for risk-assets. The Federal Reserve’s decision to halt rate hikes and potentially reduce rates in 2024 could further increase demand for crypto products.
However, it is important to note that nothing goes up in a straight line. After significant rallies, traders typically book profits and shift their attention to other cryptocurrencies. As Bitcoin takes a breather, traders are likely to focus on select altcoins.
Now, let’s analyze the top five cryptocurrencies that show potential to attract buyers in the short term.
Bitcoin Price Analysis:
The price of Bitcoin is currently squeezed between the 20-day exponential moving average ($41,370) and the downtrend line. This sets the stage for a potential breakout in the next few days.
If the price falls below the 20-day EMA, bears will see an opportunity to push the BTC/USDT pair towards the strong support level at $37,980. Bulls are expected to strongly defend this level. If the price rebounds from $37,980, it is likely to face selling pressure at the 20-day EMA and the downtrend line.
On the other hand, if the price turns up and breaks above the downtrend line, it will indicate that bulls are asserting their dominance. In that case, the pair could retest the overhead resistance at $44,700. Breaking this level would improve the chances of a rally to $48,000.
The moving averages on the 4-hour chart have turned downwards, and the relative strength index (RSI) is trading in negative territory, giving a slight advantage to the bears in the near term. Bears will need to break the $40,000 support level to accelerate selling and push the pair down to $37,980.
If the price breaks above the downtrend line, it will indicate that bulls have absorbed the selling pressure. The pair may then rise to $43,500 and potentially to $44,700, where a tough battle between bulls and bears is expected.
Cosmos Price Analysis:
Cosmos (ATOM) has been in an uptrend for several days. On December 16, bulls bought the dip to the 20-day EMA ($10.52), indicating solid demand at lower levels.
Bulls are currently trying to push the price above the immediate resistance at $12.50, but bears are putting up a fight. Nonetheless, the upward sloping moving averages and the positive RSI suggest that the path of least resistance is to the upside.
If buyers manage to drive the price above $12.50, the ATOM/USDT pair could rally to $13 and potentially to $15. However, bears will have to push the pair back below the 20-day EMA to prevent the up-move and potentially push it down to the 50-day SMA ($9.40).
The 4-hour chart shows that bears are offering strong resistance at $12, but bulls have managed to hold the price above the 50-SMA. The rising moving averages and the RSI near the midpoint give a slight edge to the bulls.
A break above $12 will complete an inverse head-and-shoulders pattern with a target objective of $13.31. Conversely, if the price turns down and breaks below the 50-SMA, it could drop to $9.50.
Filecoin Price Analysis:
Filecoin (FIL) previously faced a rejection at $5.67 on November 13 but has now reached that level again, indicating buying interest at lower levels.
The FIL/USDT pair is attempting to form a cup and handle formation, which will be confirmed on a break and close above $5.67. If this happens, it will signal the start of a new upward move with a target objective of $8.41. However, bears are likely to put up strong resistance at $6.50 and $7.40.
This bullish view would be invalidated if the price turns down and falls below the 50-day SMA ($4.61) in the near term.
On the 4-hour chart, sellers are trying to maintain the price below $5.67 after the bulls propelled it above this resistance level. If they succeed, the pair may drop to the 20-EMA, which is an important support level to monitor.
If the price rebounds off the 20-EMA, it will improve the chances of a retest of the overhead resistance at $6.20. Breaking above this resistance level would confirm the start of the next leg of the uptrend. Conversely, a break below the 20-EMA could open the doors for a fall to $4.40.
MultiversX Price Analysis:
MultiversX (EGLD) faced rejection at the overhead resistance of $70 on December 12 and subsequently reached the 20-day EMA ($55) on December 16.
The rebound off the 20-day EMA suggests that sentiment remains bullish, with traders buying on dips. Bulls will attempt to push the price to $70, a crucial resistance level in the near term. If they succeed, the EGLD/USDT pair could gain momentum and rally to $90 and $100.
However, sellers are likely to sell the rallies and push the price back below the 20-day EMA. If they manage to do so, it will signal the start of a deeper correction to the 50-day SMA ($46).
On the 4-hour chart, the pair has found support near $57 twice recently, making it a crucial level to watch in the near term. A break and close below this level could lead to a fall to $48.
Conversely, if the price turns up from the current level or the strong support at $57 and rises above $64, it will favor the bulls. This increases the likelihood of a rally to $70, where a tough battle between bulls and bears is expected.
Algorand Price Analysis:
Buyers are struggling to push Algorand (ALGO) above the overhead resistance at $0.22, but they have also not given up much ground. This indicates that bulls anticipate another upward move.
Both moving averages are sloping up, and the RSI is in positive territory, indicating that bulls are still in control. Buyers are expected to step in and purchase the dip to the 20-day EMA ($0.18). If the price rebounds from this level, bulls will attempt to break the barrier at $0.22.
If they succeed, the ALGO/USDT pair could surge to $0.24 and $0.28. However, if the pair slides and closes below the 20-day EMA, it would signal the start of a deeper correction to the 50-day SMA ($0.14).
On the 4-hour chart, the pair has been range-bound between $0.18 and $0.22 for some time. The 20-EMA has started to turn downwards, and the RSI has slipped into the negative zone, indicating a potential fall to $0.18.
Buyers are expected to strongly defend the $0.18 level because a break below it would complete a triple-top pattern with a target objective of $0.14.
If the price rebounds off $0.18, it will indicate aggressive buying on dips. The pair could then rise to the 20-EMA and potentially to $0.22. Breaking and closing above $0.22 would confirm the start of the next leg of the upward move.
Note: This article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making a decision.