Bitcoin (BTC) has experienced a strong rally, surpassing $52,000 this week, and the momentum shows no signs of slowing down. This suggests that there is continued demand for Bitcoin at higher levels. According to a report by CryptoQuant, more than 75% of new investments into Bitcoin are coming from spot Bitcoin exchange-traded funds.
However, some analysts believe that the rally may be getting overheated in the short term. It is difficult to predict the top of a rally when momentum is strong, but it is inevitable that every euphoric moment will eventually peak and be followed by a sharp correction.
Macroeconomic factors could also pose a challenge to the market rally in the near future. Initially, CME Group’s FedWatch Tool showed a 63% probability of a 25 basis points rate cut by the Federal Reserve in their March meeting. However, this expectation has dwindled to 10.5% after the Consumer Price Index and the Producer Price Index numbers for January remained above market forecasts.
The question now is whether Bitcoin will experience a correction in the near term, and if so, will it drag down the altcoins? To find out, let’s analyze the charts of the top 10 cryptocurrencies.
Bitcoin Price Analysis:
Bitcoin has faced resistance near $52,000, but the bulls have not given up, indicating that they are not rushing to take profits. The 20-day exponential moving average shows an upward slope, suggesting that the bulls have the upper hand. However, the relative strength index (RSI) above 81 indicates that the rally may have been too fast in the short term.
If the price turns down from the current level and bounces back from $48,970, it will signal that the bulls have turned this level into support, increasing the chances of a continuation of the upward movement. On the other hand, if the price stays above $52,000, the BTC/USDT pair could rally to $60,000, which will likely pose a significant hurdle. If the price falls below the 20-day EMA, it could indicate a short-term reversal.
Ether Price Analysis:
Ether (ETH) broke above the $2,717 resistance, indicating a resumption of the uptrend. The next target on the upside is the psychologically important level of $3,000. The RSI is in the overbought territory, suggesting that the rally may be overheated in the short term. This could lead to a minor correction or consolidation in the coming days.
If the price bounces off $2,717, it will indicate that sentiment remains bullish and traders see dips as buying opportunities. However, if the price falls below $2,717, it will suggest that the bulls are losing their grip, and the ETH/USDT pair could decline to the 20-day EMA.
Solana Price Analysis:
Solana (SOL) turned down from $119 and is likely to retest the neckline of the inverse head-and-shoulders pattern at $107. If the price rebounds from the neckline, it will indicate that the bulls have turned this level into support, increasing the chances of a break above $126. The SOL/USDT pair could then rally to the pattern target of $135. On the other hand, if the price breaks below the neckline, it will suggest that the bears continue to sell on rallies, and the pair may slide to $93.
BNB Price Analysis:
BNB broke above the descending triangle pattern and the overhead resistance of $338, indicating a bullish sign. However, the long wick on the candlesticks on Feb. 15 and 16 shows that bears are trying to halt the upward move near $366. If the price falls below $338, it could weaken the bulls and the BNB/USDT pair may drop to the 20-day EMA. Conversely, if the price consolidates near the current level, it will suggest that the bulls anticipate the upward move to continue, with a possible rise to $400.
XRP Price Analysis:
XRP turned up from the 20-day EMA and broke above the 50-day SMA, indicating steady buying at higher levels. The price has reached the downtrend line, which could be a battleground between the bulls and the bears. If the bulls prevail, the XRP/USDT pair could accelerate towards $0.67. However, if the price turns down sharply and breaks below the 20-day EMA, it will suggest that the bears are fiercely defending the downtrend line, and the pair may decline to $0.50.
Cardano Price Analysis:
Cardano picked up momentum and broke above the immediate resistance at $0.57. The upsloping 20-day EMA and the positive RSI suggest that the bulls have a slight edge. The next minor resistance is at $0.62, which is likely to be crossed. The ADA/USDT pair could then rally to the stiff overhead resistance at $0.68. However, a break and close below the 50-day SMA will suggest that the recent breakout may have been a bull trap, and the pair may plunge to the solid support at $0.46.
Avalanche Price Analysis:
Avalanche broke above the $42 resistance but could not sustain higher levels. The price could dip to the 20-day EMA, which is the first line of support. If the price turns up from the 20-day EMA, it will increase the likelihood of a break above $42 and a rally to $50. However, if the price continues to decline and breaks below the moving average, it could indicate a sideways movement between $32 and $42.
Dogecoin Price Analysis:
Dogecoin turned up from the 20-day EMA and broke above the downtrend line, suggesting that the bulls are trying to take control. If the price stays above the downtrend line, the DOGE/USDT pair could pick up momentum and surge towards the $0.10 to $0.11 resistance zone. However, if the price falls and breaks below the 20-day EMA, it could indicate that higher levels are being sold into, and the pair may decline to the uptrend line and later to the strong support at $0.07.
Chainlink Price Analysis:
Chainlink has faced profit booking near $20.85, but the bulls have not given up much ground to the bears, indicating a positive sentiment. The 20-day EMA and the RSI in the positive zone also favor the buyers. A break above $20.85 could open the doors for a move to the pattern target of $21.79. However, if the price falls below the 20-day EMA, the LINK/USDT pair may plummet to $17.32.
Polkadot Price Analysis:
Polkadot has sustained above the 50-day SMA, indicating buying from the bulls. The moving averages are on the verge of a bullish crossover, and the RSI is in the positive zone, suggesting that the bulls are making a comeback. The 20-day EMA is likely to act as support on dips, and the bulls will aim to push the price to $8.58. However, a sharp downturn and a break below the moving averages could negate this view, leading the pair to slump to $6.
It’s important to note that this article does not provide investment advice or recommendations. Every investment and trading move carries risk, and readers should conduct their own research before making a decision.