After the impressive rally in January, the bitcoin (BTC) price seems to take a breather in February. This is a positive sign because vertical rallies are rarely sustainable. A small drop could shake jittery longs and give long-term investors a chance to add to their positions.
Has the bitcoin price bottomed out?
However, opinion remains divided on whether bitcoin has bottomed or not. Some analysts expect the rally to reverse direction and plummet below the November low, while others believe that markets will continue to rise and frustrate traders hoping to buy at lower levels.
In an interview with Cointelegraph, the founder and CEO of Morgan Creek Capital Management, Mark Yusko said that “cryptosummer” could start for the second quarter of this year.
He expects risk assets to turn bullish if the US Federal Reserve signals it will slow or pause interest rate hikes.. Another potential bullish catalyst for bitcoin is the block reward halving in 2024.
Could altcoins continue to rise as the bitcoin price consolidates in the near term? Let’s study the bitcoin charts and select the altcoins that could outperform in the coming days.
Bitcoin has been gradually correcting since hitting $24,255 on Feb. 2. This indicates profit taking by short-term traders. The price is approaching the strong support zone between $22,800 and $22,292. The 20-day exponential moving average ($22,436) is also in this area, so buyers are expected to defend the area with all their might.
The upward slope of the 20-day EMA and the RSI in positive territory indicate that the bulls have the upper hand.. If the price rises from the support zone, the bulls will try again to catapult the BTC/USDT pair to $25,000. This level should act as formidable resistance.
To the downside, a break below the support zone could trigger several stop losses and that could initiate a deeper pullback. The pair could first drop to $21,480 and if this support also doesn’t hold, the next stop could be the 50-day SMA ($19,572).
The 4-hour chart shows that the price is trading within a rising channel, but the RSI has been forming a negative divergence.. This suggests that the bullish momentum may be weakening. A break and close below the channel could tip the short-term advantage in favor of the bears.. The pair could fall towards $21,480.
On the other hand, if the price bounces off the support line of the channel, the bulls will try again to push the pair above the channel. If they do, the pair could resume its uptrend.
Ether (ETH) has been trading near the $1,680 resistance for the past few days. Typically, a tight consolidation near overhead resistance resolves to the upside.
Although the bullish 20-day EMA ($1,586) indicates an advantage for buyers, the negative divergence on the RSI suggests that the bulls may be losing their grip. If the bulls want to reassert their dominance, they will have to drive and sustain the price above 1,680..
If they succeed, the ETH/USDT pair could rally to $1,800. This level can again act as a resistance, but if the bulls do not allow the price to fall below $1,680, the rally may extend to $2,000.
Instead, if the price turns down and breaks below the 20-day EMA, the ETH/USDT pair could drop as low as $1,500. This is an important support level to watch because a bounce here could keep the pair in a range between $1,500 and $1,680. On the other hand, if the $1,500 support breaks, the pair could drop to $1,352.
On the 4-hour chart, the bears have dragged the pair below the 20-EMA. This is the first indication that the bulls may take a step back. There is a bit of support at the 50-SMA, but if it doesn’t hold, the pair can drop to $1,550 and then $1,500..
On the contrary, if the pair breaks out of the moving averages, the bulls will try again to overcome the resistance. If they succeed, the pair could resume the uptrend.
While most cryptocurrencies are well below their all-time highs, OKB (OKB) reached a new high on February 5. This suggests that the bulls are in command.
Some traders could take profits near the $44.35 resistance, as it can act as a formidable resistance. If the price turns down from the current level but bounces off the 20-day EMA ($37), the bulls will continue to buy dips..
This would increase the possibility of breaking above $45. OKB/USDT pair could shoot up to $50 first and then $58.
If the pair turns down and breaks below the 20 day EMA, investors would rush out. The pair could drop as low as $34 and then down to the 50-day SMA ($30).
On the 4-hour chart, the bears are trying to protect the $44.35 level. The pair could turn lower and reach the moving averages, which is an important support to watch. If the price bounces off the moving averages, the bulls will once again try to break out of the $45 barrier and start the next leg of the uptrend.
On the contrary, if the price breaks below the 50-SMA, the selling could intensify and the pair could drop to $36 and then $34. Such a move could delay the resumption of the uptrend.
Algorand (ALGO) rally reached the breakout level of $0.27 on Feb 3. The bears defended this level, but the bulls have not given up much ground. This suggests that the bulls are waiting for the relief rally to continue.
The rising 20-day EMA ($0.24) and the RSI in the positive territory indicate that the bulls have the upper hand. If the price turns higher from the 20-day EMA, the probability of a break above $0.27 increases. The ALGO/USDT pair could reach $0.31 where the bears could try to offer significant resistance.
If the pair pulls back from this level but bounces off $0.27, this would indicate that the downtrend may be over in the short term.. The pair could try a rally to $0.38.
This positive view could be invalidated in the short term if the pair turns lower from the current level and turns below $0.23.. In that case, the pair could drop to the 50-day SMA ($0.21).
The 4-hour chart shows that the bears are keeping an eye on the $0.27 level, but one small bright spot is that the bulls have not allowed the price to sustain below the 50-SMA. If the price rises from the current level, the bulls will try again to overcome the hurdle. If they do, the pair could pick up momentum and approach $0.31.
On the contrary, if the price continues below the moving averages, the pair could drop as low as $0.23. The bears will have to break this support to gain an advantage.
Theta Network (THETA) successfully retested the February 1 breakout levelIndicating that the bulls have turned the downtrend line into support.
The bulls will try to push the price towards the overhead resistance of $1.20. This level can act as a minor obstacle, but If the bulls don’t give up too much ground from $1.20, the THETA/USDT pair could extend its move up to $1.34. This is an important level for bears to defend, as if this resistance collapses, the pair could shoot up to $1.65.
If the bears want to restrain the bulls, they will have to pull the pair back below the 20 day EMA. Then the pair could drop to $0.97 and later to the 50-day SMA ($0.89).
The pair bounced off the $0.97 level, which becomes an important level to watch on the downside.. A break of this level is likely to tip the advantage in favor of the bears and open the doors for a potential drop to $0.85.
The rally is facing resistance near $1.20, but the upward slope of the 20-EMA and the RSI in positive territory indicate that the path of least resistance is to the upside. If the buyers push the price above $1.20, momentum should rally towards $1.34.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.