Bitcoin (BTC) saw a roller coaster ride in 2021 and even though BTC has sharply corrected from its all-time high of $69,000, the digital asset is still up 60% year-on-year. In the same period, gold has fallen by more than 5 per cent.
With inflation rising in the United States and many other parts of the world, bitcoin’s outperformance against gold suggests that investors may consider it a better hedge against inflation than gold.
During the year, the total crypto market capitalization rose to nearly $3 trillion, but bitcoin dominance fell to 40% from around 70% at the start of the year. This shows that many altcoins have outperformed bitcoin by a huge margin.
As cryptocurrencies gain wider adoption, many altcoins are likely to attract investor attention. These can give strong returns for the investors next year.
Technical analysis has been used to access the current list of Large-cap cryptocurrencies that may remain in focus in 2022 and benefit from the crypto bull run.
Let’s study the chart of the top five cryptocurrencies to calculate their potential target objectives and support levels to watch in 2022.
BTC/USDT
Bitcoin (BTC) broke and closed above upper resistance at $64,854 in early November, but the long wick on the candlestick shows profit-booking at higher levels. Selling continued over the next week and the price declined below $64,854.
The bulls attempted to defend the 20-week exponential moving average (EMA) ($51,999) but could not sustain the rally. This triggered a selloff and pulled the price below the 50-week simple moving average (SMA) ($47,681).
The bulls bought the dip but failed to extend the recovery above the 20-week EMA. This indicates a possible change in sentiments ranging from buying on the downside to selling on the rallies. The bears are once again attempting to pull and hold the price below the 50-week SMA.
If they succeed, the BTC/USDT pair could decline to the strong support level of $39,600. The 20-week EMA has started to move down and the relative strength index (RSI) has slipped below 50, indicating that the bears have the upper hand.
A further close below $39,600 could result in a deeper correction towards $28,805. Such a sharp drop may delay the start of the next leg of the uptrend.
On the other hand, if the bulls successfully defend the 100-week SMA, the pair will make another attempt to rise above the 20-week EMA. If this happens, the pair will attempt to rebound in the upper zone from $64,854 to $69,000.
A break and close above this zone could start the next phase of the uptrend that could push the pair to a psychologically important level at $100,000.
ETH/USDT
Ether (ETH) is correcting in a strong uptrend. Both the moving averages are sloping and the RSI is in positive territory, indicating that the bulls have the upper hand.
While the bears are trying to pull the price below the 20-week EMA ($3,745), the long tail on the candlesticks of the past few weeks suggests that the bulls are buying aggressively at lower levels.
The bulls will now make another attempt to clear the upper hurdle at the psychologically important $5,000 level. If they succeed, the ETH/USDT pair could start the next leg of the uptrend with the first target at the 100% Fibonacci extension level at $5,719.68.
If momentum holds the price above this level, the next targets to watch are the 138.2% Fibonacci extension level at $6,566.19 and then the 161.8% extension level at $7,089.17.
Contrary to this assumption, if the price breaks below the current level or upper resistance and breaks below the 20-week EMA, it would indicate that traders are selling on the rallies. This could open the door for a potential downside correction towards strong support at $2,652.
This is an important level to watch on the downside as a break below it could pull the pair up to $1,700.
BNB/USDT
Binance Coin (BNB) fell below $669.30, indicating that the bears are aggressively defending the all-time high of $691.80. However, there is a slight positive that the bulls are buying into the downside in the 20-week EMA ($500).
The upsloping moving average and RSI are in positive territory, indicating that buyers have the upper hand.
If the price reverses from the current levels, the BNB/USDT pair could move higher to the overhead zone from $669.30 to $691.80. The bulls need to clear this hurdle to signal the resumption of the uptrend.
If this happens, the pair can start the next phase of growth up to $848.30 and then try to rebound to $1,171.90.
Another possibility is that the price bounces off the 20-week EMA but bounces back from the upper resistance. In such a case, the pair may remain confined for a few weeks.
A consolidation near the all-time high is a positive sign as it shows that traders are not rushing to exit. This increases the chances of the up-move continuing.
Conversely, if the bears break below the 20-week EMA and sustain the price, it would indicate that supply is exceeding demand. This could result in a decline in the 50-week SMA ($379). A break and close below this level may invalidate the bullish sentiment.
related: Nexo co-founder aims to make bitcoin $100K by the middle of 2022
AVAX/USDT
Avalanche (AVAX) bullish rally from the all-time high of $147 pushed the RSI near the 85 level to indicate that the up-move was extended in the near term. This can result in profit-booking by short-term traders.
The bears pulled the price below $81 for three consecutive weeks, but they could not sustain the lower levels as seen from the long tail on the candlesticks. This indicates that the bulls have converted the previous resistance at $81 into support.
A strong bounce off the 20-EMA ($73) indicates that sentiment remains bullish and traders are buying on a downside. The bulls will now attempt to push the price higher to the all-time high of $147.
A break and close above this resistance could initiate the next leg of the uptrend. Then the AVAX/USDT pair could rise to $213.17 and if the momentum continues, a rally to $260 could also extend.
This bullish view will be invalidated if the price falls from the current level or upper resistance and falls below $75.50. Such a move would indicate that sentiment has turned negative and traders are selling on the rallies.
The pair can then decline to the strong support level of $50. Such a deep drop is likely to delay the start of the next leg of the up-move.
MATIC/USDT
POLYGON’s MATIC has been in an uptrend. The bulls attempted to push the price above the all-time high of $2.70 but failed. This suggests that the bears are aggressively defending the upper resistance.
However, a positive sign is that the bulls are buying into the downside at the 20-week EMA ($1.62). This indicates that sentiment remains bullish and traders are consolidating on the downside.
The RSI is near a rising moving average and the overbought zone indicates that the path of least resistance is on an upward trend. The bulls will make another attempt to push the MATIC/USDT pair above $2.70.
If they manage to do so, the pair can start the next phase of the uptrend which can reach $3.28. A break and close above this level could extend the rally to $4 and eventually to $4.77.
Contrary to this assumption, if the price breaks below the current level or upper resistance and breaks below the 20-week EMA, it would suggest that supply is exceeding demand.
If the price remains below the 20-week EMA, then selling can pick up momentum and the pair may fall to the 50-week SMA ($1.04).
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, so you should do your own research when making a decision.
