The Dow Jones Industrial Average fell for the third week in a row, but the price of Bitcoin (BTC) has decoupled and is on track to close the week near the strong resistance above $25.211. This suggests that the cryptocurrency market recovery is on a solid footing.
Following Bitcoin’s strong rally from its lows, analysts remain divided in their opinion on the next move. Some traders believe that the current rally in Bitcoin will turn lower, but others expect the momentum to continue, signaling the start of a new bullish phase.
Bitcoin and other cryptocurrencies will most likely continue to rise until the vast majority of shorts turn bullish. After this occurs, a considerable drop is likely. That could shake up several weak hands and give stronger hands a chance to add to their positions. A higher low followed by a higher high can confirm the end of the bear phase and signal the start of the next bull market.
Meanwhile, some altcoins look strong and could follow Bitcoin in the short term.
Let’s look at the charts to determine the critical levels to watch.
BTC/USDT
Bitcoin is trading near the resistance of $25,211. The small trading range on February 18-19 indicates that bulls are not rushing to take profits and bears are cautious about going short at current levels.
The bullish moving averages and the RSI near overbought territory indicate that the bulls are firmly in command. A tight range consolidation near strong overhead resistance usually resolves to the upside. If the buyers catapult the price above $25,250, the BTC/USDT pair could accelerate towards $31,000 as there is no major resistance in between.
Conversely, if the price turns down from the current level, it could find support at the 20-day exponential moving average ($23.115). The bears will have to sink the price below $22,800 to break the bullish momentum. Then the pair could break down to $21,480, which is likely to act as strong support.
The bears aggressively sold the rally to $25,250, but were unable to pull the price below the 20 EMA. This suggests that sentiment remains strong and the bulls are viewing dips as a buying opportunity.
Buyers are likely to try to break through the resistance again. If they manage to break above $25,250, the next leg of the uptrend could begin.
The first sign of weakness will be a break below the 20 EMA. This will embolden the bears, who will try to sink the price as low as $22,800.
FIL/USDT
Filecoin (FIL) spiked above the immediate resistance level of $7 on Feb. 17. This demonstrates the intention of the bulls to initiate a new move to the upside.
After a brief consolidation on February 18, the bulls continued the rise on February 19. This strong rally signals aggressive buying by the bulls. There is a bit of resistance at $9.53, but it is likely to be crossed.
The FIL/USDT pair could then target $11.39. This level is likely to act as a major hurdle, but if the bulls do not allow the next pullback to drop below $9.53, the uptrend could continue. The next resistance lies at $16.
This positive view could be negated in the short term if the price turns down from the current level and breaks below $7.
The 4-hour chart shows that the bears tried to stop the rally at $8, but the bulls did not allow the price to pull back below the breakout level of $7, indicating aggressive buying on every small dip. The rally accelerated and it reached the overhead resistance of $9.53.
The sellers can mount a strong defense at this level, but the upward slope of the 20 EMA and the RSI in the overbought zone indicate that the path of least resistance is to the upside. If the bears want to stop the rally, they will have to pull the price back below $8.
USDT/OKB
While most cryptocurrencies are languishing well below their all-time high, OKB (OKB) has been steadily hitting new highs in recent days. Any asset that reaches a new all-time high denotes strength.
The OKB/USDT pair turned lower on Feb. 18, signaling profit taking above $58. In a strong uptrend, corrections typically don’t last more than three to five days. If the price rises from $50, the bulls will try to push the pair above $59. If they succeed, the pair could start its path towards $70.
Another possibility is that the pair could correct sharply and retest the $45 support. If the buyers turn this level into support, the pair could consolidate between $45 and $58 for a few days. The bears will have to sink the price below $44 to gain an advantage.
On the 4-hour chart, buyers have bought the dip towards the 20 EMA, but the bounce lacks strength. Despite the uptrend of the moving averages, the RSI shows a negative divergence. This indicates a weakening of the bullish momentum. If the 20 EMA cracks, the pair could drop as low as $47.50, and then as low as $44.35.
On the other hand, if the price rises and breaks above $55, the bulls could try again to reach the all-time high of $58.84. If this level is broken, the pair could resume its uptrend.
VET/USDT
VeChain (VET) successfully held the retest of the downtrend line and subsequently broke above overhead resistance, indicating that the bears may be losing their grip.
The moving averages have risen and the RSI is close to the overbought zone. This suggests that the bulls have the upper hand. If the buyers turn the $0.028 level into support during the next pullback, the VET/USDT pair could rally towards the next resistance above $0.034.
Buyers are expected to protect this level with all you have, as a break above it could signal the start of a new uptrend. The pair could then rally as high as $0.05. This positive view could be invalidated in the short term if the price turns lower and breaks below the 20-day EMA ($0.025).
On the 4-hour chart, the bulls broke above the overhead resistance, signaling the start of the next bullish leg. If the bulls hold the price above the breakout level, the pair could pick up momentum and quickly rally to $0.032 and then $0.034.
Conversely, if the price turns lower from the current level and breaks below the 20 EMA, several aggressive bulls may get trapped. This could lead to a deeper correction. The pair could drop as low as $0.022.
RPL/USDT
Rocket Pool (RPL) has been in an uptrend for the past few days. The price has not broken below the 20-day EMA ($45) during pullbacks, signaling strong buying demand at lower levels.
The intra-day candlestick pattern on Feb. 18-19 shows that the bears are trying to stall the uptrend near $56, but the bulls are unwilling to give up their lead. If the buyers push the price above $57, the RPL/USDT could march towards the next target at $74.
To the downside, the first support is found at the psychological $50 level. If this level gives way, the pair could slide towards the 20-day EMA ($45). This is an important level for bulls to defend, as a break below could signal a short-term trend change.
The 4-hour chart shows that the US is trying to defend the $56 level, but the bulls have not given up much ground. That is why buyers are holding their positions as they anticipate a break above resistance. If this happens, the pair could reach $61 and then $74.
Contrary to this hypothesis, if the price turns down and breaks below the 20 EMA, the bulls will have given up and are taking profits. This could lead to a deeper correction to the 50 SMA and then $38.
The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. All investing and trading involves risk, so readers should do their own research before making a decision.