Bitcoin (BTC) and most major altcoins are attempting to bounce off their respective support levels, indicating that buyers continue to accumulate on the downside.
Data from CoinGlass shows that 9,925 bitcoins left Coinbase Pro, the professional trading arm of Coinbase, on December 30, a possible sign of institutional buying. This is in sharp contrast to the strong inflows seen on Binance and OKEx. Many analysts are of the view that there could be an uptick in institutional buying in January.
Economist and trader Alex Kruger expects a bitcoin rally in early January based on fund inflows. He also pointed out that January has produced positive results for bitcoin between 2018 and 2021, with gains ranging from 7% to 36%.
While investors debate about the next possible direction of the crypto markets, microstrategy continues to accumulate bitcoin on the downside. According to a filing with the US Securities and Exchange Commission, the business intelligence firm bought 1,914 bitcoins between December 9 and December 29. The recent purchase has increased the company’s holdings to 124,391 bitcoins.
Can Bitcoin Lead a Strong Recovery in the Crypto Markets in the New Year? Let’s study the chart of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin rebounded from the $45,456 support level and climbed above the 200-day simple moving average (SMA) ($47,826). However, the bulls are likely to face a strong challenge at the 20-day exponential moving average (EMA) ($49,096).
If the price breaks below the current level or the 20-day EMA, it would suggest that the bears are selling on each short rally. This will increase the chances of a drop below $45,456. If this happens, the BTC/USDT pair could decline towards the strong support area of $42,000 to $40,000.
The Relative Strength Index (RSI) is forming a potential positive divergence, which suggests that selling pressure is likely to ease.
If the bulls push the price above the 20-day SMA, the pair could rally to $51,936.33. A breakout and close above this resistance could result in a 50% Fibonacci retracement level of $55,000 and then the 61.8% retracement level of $58,686.
ETH/USDT
Ether (ETH) has reversed a strong support area from $3,643.73 to $3,503.68. The bulls will now attempt to push the price towards the 20-day EMA ($3,952), which is an important level to watch.
If the price breaks below the 20-day EMA, it would indicate that sentiment remains negative and traders are selling on rallies. The bears will then make another attempt to push the price below the support area.
A break and close below the 200-days SMA ($3,365) could signal the start of a deeper correction towards $2,800. If the price breaks out and sustains above $4,200, this downside outlook will be negated. The ETH/USDT pair can then rise to $4,488 and later to $4,868.
BNB/USDT
Binance Coin (BNB) is trying to bounce back from the strong support at $500. The recovery could face a selloff at the 20-day EMA ($540). If the price breaks below this level, it would indicate that sentiment remains negative and traders are selling on rallies.
A decline in the 20-day EMA and RSI in negative territory indicates that the bears are in command. A break and close below $500 could trigger a selloff and the BNB/USDT pair could drop to the 200-days SMA ($445).
Contrary to this assumption, if the price rises above the 20-day SMA, the bulls will attempt to push the pair above $575. If they succeed, the pair can rebound to $617 and later to the upper resistance zone of $669.30 to $691.80.
SOL/USDT
Solana (SOL) is attempting a rally to $167.88. A relief rally could face a strong selloff at the 20-day EMA ($182). The RSI is in negative territory and the 20-day EMA is slowly trending down, indicating that the bears are in an advantage.
If price declines and falls below the support level of $167.88, SOL/USDT pair may decline to $148.04. The bulls may try to defend this level, but if support gives way, the pair could begin its downward journey towards the 200-day SMA ($128).
This downside outlook will be invalidated if the bulls push the price above the 20-day SMA and the upper resistance at $204.75. The pair can then rise to the resistance line of the descending wedge pattern. A further close above this level could clear the way for an all-time high of $259.90.
ADA/USDT
Cardano (ADA) broke below the 20-day EMA ($1.38) on December 29 and closed, but buyers are yet to give up. They are attempting to push the price above the 20-day EMA.
If they succeed, the ADA/USDT pair may rise to the resistance line of the descending channel. Bears can defend this level aggressively. If the price breaks below the resistance line, the pair can extend its stay inside the channel for a few more days.
A break and close above the channel would be the first indication of a possible trend reversal. Conversely, if the price breaks below the current level, the pair can drop to $1.18. This is an important level to watch because if it breaks, the pair can drop to $1.
XRP/USDT
Ripple (XRP) is in the range between $1 and $0.75. The price rebounded from $0.80 on December 30th and the bulls will now attempt to push the price above the 20-day EMA ($0.88).
If they do, the XRP/USDT pair could rise to the 200-day SMA ($0.94) and then to upper resistance at $1. The bulls will need to push the price higher and hold above this resistance to signal the start of a sustained correction.
The 20-day EMA is declining and the RSI is below 45, which indicates that the bears have the upper hand. If the price breaks below the 20-day EMA, the bears will attempt to push the pair below $0.75. A break below this level could clear the way for a drop to $0.60.
Luna/USDT
Terra’s LUNA token bounced off the 20-day EMA ($81) on December 30, indicating that sentiment remains positive and traders are buying on the downside.
The bulls will now attempt to push the price higher to the all-time high of $103.60. A break and close above this resistance would signal the start of the next leg of the uptrend which could reach $135.26 and then $150.
On the other hand, if the price declines from $93.81 and breaks below the 20-day EMA, it would indicate that traders are closing their positions on the rallies. The LUNA/USDT pair can then decline to the 61.8% Fibonacci retracement level at $71.61.
related: Frax Shares, Swipe and Gnosis lead the altcoin market as bitcoin climbs to $47.5k . till it gets better
AVAX/USDT
Avalanche (AVAX) rebounded from the minor support at $98 on December 30th and the bulls are now attempting to push the price above the 20-days EMA ($107).
If they succeed, the AVAX/USDT pair could rise to the downtrend line where the bears can provide stiff resistance. A break and close above this level will be the first indication that the correction may be over.
The pair can then move up to $128. If the bulls push the price above this resistance, it will complete a bullish reversal head and shoulders pattern. The pair may first retest the all-time high of $147 and then attempt a rally towards the pattern target of $177.50.
Conversely, if the price falls from the 20-day EMA and breaks below $98, the pair can drop to $75.50.
dot / usdt
Polkadot (DOT) broke below the 20-day EMA ($28) on December 28 and the bears have successfully thwarted the bulls’ attempts to push the price back above the moving average.
If the price breaks below the current level, the bears will try to push the DOT/USDT pair below the $25 to $22.66 support area. If this happens, the selloff could accelerate and the downside could extend to $16.81.
Alternatively, if the price rises above the moving average, buyers will attempt to move the pair above $31.49. If they manage to do so, it could open the door for a potential rally to $39.50 and later to $43.56.
doge/usdt
Dogecoin (DOGE) broke below the 20-day EMA ($0.17) on December 28, but the bears could not challenge the key support at $0.15. This suggests that selling dries up at lower levels.
The bulls are attempting to push the price above the 20-day EMA. If they manage to do so, the DOGE/USDT pair could rally against the upper resistance level of $0.19. A break and close above this level would signal a possible start of a fresh up-move that could reach the 200-days SMA ($0.23).
Conversely, if the price falls below the 20-day EMA, the bears will attempt to push the pair below $0.15. This is an important level for the bulls to defend because if it breaks, the pair can drop to $0.13 and eventually to the psychological support at $0.10.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should do your own research when making a decision.
Market data is provided by hitBTC transaction.