Certain altcoins such as Bitcoin and AVAX Coin are showing strength at the start of the week as investors shift their focus to more than spot Bitcoin ETF flows. Can Bitcoin sustain its recovery, or will higher levels attract strong selling by bears? How will your altcoins move? Technical analyst Rakesh Upadhyay examines the charts to find out.
An overview of the cryptocurrency market
US stock markets continue to rise, supported by strong economic growth and signs that inflation may be slowing on a yearly basis. Bitcoin followed suit, rising 11% on its weekly chart. This was an impressive performance considering BTC price dropped as low as $38,500. The strong recovery suggests solid buying at lower levels.
Data from FedWatch Tool shows that the Federal Reserve will keep interest rates steady at its January 31 meeting. However, it indicates that interest rates will be reduced as of the March meeting. An expansionary monetary policy is generally a positive sign for risky assets.
BTC, ETH, BNB and XRP Coin analysis
Bitcoin (BTC) price analysis
Buyers attempted to push Bitcoin above the 50-day SMA ($42,795) on January 28 and 29. But the bears held their ground. Flat moving averages and RSI near the midpoint do not give bulls or bears a clear advantage.
If the bulls push the price above the 50-day SMA, it is possible for BTC to reach $44,700. This level is likely to attract strong selling by the bears. If the price turns down from $44,700 and breaks below the moving averages, it will indicate that the range-bound movement will continue for a few more days. On the other hand, if the price breaks and stays below the 20-day EMA ($41,950), BTC is likely to gradually decline to $40,000 and then to $37,980. The next trend move is likely to begin after buyers push the price above $44,700 or bears sink BTC below $37,980.
Ethereum (ETH) price analysis
The long wick on the Ether January 28 candlestick indicates that the bears are selling near the moving averages. The 20-day EMA ($2,340) has started to turn lower and the RSI is in the negative territory. This suggests that the bears have a slight advantage.
Sellers will try to push the price towards $2,168 and then the strong support at $2,100. It is possible that a strong recovery from this level will keep ETH in the $2,100 to $2,400 range for a while. The first sign of strength will be a breakout and close above the moving averages. ETH is then likely to rally towards $2,400, which is a key resistance. If it manages to surpass this level, it is possible for ETH to rise to $2,600.
Binance Coin (BNB) price analysis
BNB has been trading inside a descending triangle formation for the last few days. This shows that the bears are trying to take control. However, it is a positive sign that the bulls successfully defended the $288 support and pushed the price above the 20-day EMA ($304).
BNB is likely to reach the downtrend line, which is an important resistance to watch out for. If buyers push the price above the downtrend line, the bearish formation will be invalidated. It is possible for BNB to rally towards $338 later. Sentiment will turn negative after the bears sink the price below the $288 support and complete the descending triangle formation. This is also likely to start a decline towards $260.
Ripple (XRP) price analysis
XRP has been stuck in a wide range between $0.46 and $0.74 for several months. This shows that there is buying from support and selling near resistance. The moving averages are sloping down and the RSI is below 37. This is a sign that the bears have the upper hand.
Sellers will try to push the price below the psychological support of $0.50. Moreover, it will challenge the critical level of $0.46. Buyers will strongly defend the $0.46 support. Because a break below this could open the doors to $0.41. The bulls will have to push and hold the price above the downtrend line to signal a reversal. In this case, it is possible for XRP to jump to $0.67 and eventually to $0.74.
SOL, ADA, DOGE and AVAX Coin analysis
Solana (SOL) price analysis
The bulls are trying to keep SOL above the bearish trend line. This is the first sign that the correction is ending.
The horizontal moving averages and the RSI just above the midpoint indicate a balance between buyers and sellers. A break above $104 is likely to tip the advantage in favor of the bulls. On the contrary, if the price declines sharply and breaks below the moving averages, it will indicate that the bears are active at higher levels. This is likely to trap the aggressive bulls and push SOL towards $80.
Cardano (ADA) price analysis
ADA’s pullback reached the 20-day EMA ($0.50) on January 28. As we see from the long wick on the candlestick, this place acts as a hard resistance.
If the price turns down from the current level, the bears will try to pull ADA back to the support line of the channel near $0.42. Bulls will want to maintain this level. Because if they fail in their efforts, it is possible for ADA to drop to $0.35. On the upside, a break above the 20-day EMA would open the doors for a possible rally to the downtrend line of the channel. Buyers will need to penetrate the bearish trend line to indicate that the correction has ended.
Avalanche (AVAX Coin) price analysis
AVAX Coin broke above the 20-day EMA ($34) on January 28. Thus, it showed that the bulls are trying to make a comeback. However, the long wick on the candlestick shows that the bears will not give up easily.
It is possible that AVAX Coin price may reach the bearish trend line, which is likely to act as a major barrier. If the price turns down sharply from the current level or the downtrend line and breaks below the 20-day EMA, AVAX Coin price is likely to remain inside the channel for some more time. Buyers will need to pull the price above the channel to indicate a potential trend change in the near term. AVAX Coin price is likely to start a bull move towards $44. Then, a rally attempt towards the psychologically important $50 level is possible.
Dogecoin (DOGE) price analysis
The bulls failed to push DOGE above the 20-day EMA ($0.08) on January 28. However, he kept up the pressure and broke the barrier on January 29. Downward sloping moving averages indicate an advantage for the bears. However, the RSI near the midpoint indicates that bearish momentum is waning.
If buyers hold the price above the 20-day EMA, it is possible for DOGE to rise to the bearish trend line. The bears have successfully defended this level in the past and will try to do so again. However, if buyers overcome the hurdle at the bearish trend line, DOGE is likely to begin its journey towards the $0.10 to $0.11 resistance zone. Important support on the downside stands at $0.07.
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