Bitcoin’s (BTC) eight-week winning streak is set to end as the price is down nearly 4% this week. The recent weakness indicates that traders have taken profits, but it does not change the short-term uptrend. Removal will also help reduce any foam that may have formed.
After the initial upheaval, strong hands are likely to re-enter the crypto market as the macroeconomic environment remains bullish for risk assets. The Federal Reserve’s decision to suspend rate hikes and possibly reduce them in 2024 could further boost demand for crypto products.
However, nothing goes up in a straight line. After sharp rebounds, traders usually book profits and focus on other coins. As Bitcoin takes a breather, traders will likely turn their attention to certain altcoins.
What pieces could attract buyers in the short term? Let’s take a look at the charts of the top five promising cryptocurrencies.
Bitcoin Price Analysis
Bitcoin is stuck between the 20-day exponential moving average ($41,370) and the downtrend line. This sets the stage for a strong breakout in the coming days.
If the price dips below the 20-day EMA, bears will sense an opportunity and attempt to pull the BTC/USDT pair towards the strong support at $37,980. The bulls are expected to defend this level fiercely. If the price rebounds from $37,980, it will likely face a sell-off at the 20-day EMA and the downtrend line again.
Instead, if the price rises and breaks above the downtrend line, it will suggest that the bulls are asserting their dominance. The pair could then retest overhead resistance at $44,700. If this level is increased, the prospects for a rally to $48,000 improve.
The moving averages on the 4-hour chart have declined and the Relative Strength Index (RSI) is trading in negative territory, indicating that the bears have a slight advantage in the near term. The bears will need to break the $40,000 support to accelerate the selling and send the pair down to $37,980.
On the upside, a break above the downtrend line will suggest that the bulls have absorbed the selling. The pair could first reach $43,500 and then rise again to $44,700. This level could witness a tough battle between the bulls and the bears.
Cosmos price analysis
Cosmos (ATOM) has been in an uptrend for several days. Bulls bought the dip at the 20-day EMA ($10.52) on December 16, indicating solid demand at lower levels.
The bulls attempt to propel the price above the immediate resistance at $12.50, but the bears do not relent. However, the ascending moving averages and the RSI in the positive zone suggest that the path of least resistance is to the upside.
If buyers push the price above $12.50, the ATOM/USDT pair could rally to $13 and then to $15. If the bears want to prevent the rise, they will need to bring the pair back below the 20-day EMA. The pair could then plunge to the 50-day SMA ($9.40).
The 4-hour chart shows that the bears are providing strong resistance at $12, but a positive sign is that the bulls have not allowed the price to move below the 50-SMA. The rising moving averages and the RSI near the midpoint give a slight advantage to the bulls.
A break above $12 will complete an inverse head-and-shoulders pattern. This bullish setup has a target objective of $13.31. On the contrary, if the price declines and crosses below the 50-SMA, it will pave the way for a decline to $9.50.
Filecoin price analysis
Filecoin (FIL) fell from $5.67 on November 13 but reached that level again. This shows that lower levels are being purchased.
The FIL/USDT pair is attempting to form a cup and handle formation, which will end on a breakout and close above $5.67. If this happens, the pair will signal the start of a new upward move. The pattern target of the reversal pattern is $8.41.
However, bears are unlikely to give up easily. They will pose a significant challenge at $6.50 and again at $7.40. This bullish view will be invalidated in the short term if the price declines and falls below the 50-day SMA ($4.61).
The bulls propelled the price above the $5.67 resistance but were unable to sustain the higher levels. Taking advantage of the situation, sellers are trying to pull and keep the price below $5.67. If they succeed, the pair could fall to the 20-EMA. This remains an important support to watch.
If price rebounds from the 20-EMA, it will improve the prospects of a retest of overhead resistance at $6.20. A break above this resistance will signal the start of the next leg of the uptrend. On the other hand, a break below the 20-EMA could open the door for a fall to $4.40.
Related: Bitcoin Fees Hit 20-Month High as Miner Revenues Match BTC Price of $69,000
MultiverseX Price Analysis
MultiversX (EGLD) declined from the $70 resistance on December 12 and reached the 20-day EMA ($55) on December 16.
The rebound from the 20-day EMA indicates that sentiment remains bullish and traders are buying on dips. The bulls will attempt to push the price to $70, which remains the crucial resistance to watch in the near term. If buyers overcome this hurdle, the EGLD/USDT pair could gain momentum and rally to $90 and then $100.
Meanwhile, sellers will likely have other plans. They will try to sell the rallies and bring the price back below the 20-day EMA. If they succeed, it will signal the start of a deeper correction to the 50-day SMA ($46).
The pair recently reached support near $57 twice, making it the crucial level to watch in the near term. A breakout and close below this level could open the door to a fall to $48.
Conversely, if the price rises from the current level or strong support at $57 and breaks above $64, it will suggest an advantage to the bulls. This increases the possibility of a rally to $70, which could result in a tough battle between the bulls and bears.
Algorand Price Analysis
Buyers are struggling to propel Algorand (ALGO) above overhead resistance at $0.22, but a positive sign is that they have not given up much ground. This shows that the bulls are anticipating another rise.
Both moving averages are rising and the RSI is in positive territory, indicating that bulls remain in charge. Buyers should buy the dip to the 20-day EMA ($0.18). If the price rebounds from the 20-day EMA, the bulls will attempt to breach the $0.22 barrier again.
If they do, the ALGO/USDT pair could rise to $0.24 and then to $0.28. This positive view will be invalidated in the short term if the pair slips and closes below the 20-day EMA. This will mark the start of a deeper correction to the 50-day SMA ($0.14).
The pair has been trading between $0.18 and $0.22 for some time. The 20-EMA started to decline and the RSI fell into the negative zone, increasing the probability of a decline to $0.18.
Buyers should vigorously protect the $0.18 level as a break below will complete a triple top pattern. This bearish setup has a target objective of $0.14.
If the price rebounds strongly off $0.18, it will indicate aggressive buying on the dip. The pair could then rise to the 20-EMA and then to $0.22. A breakout and close above $0.22 suggests the start of the next leg of the upward move.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.