Bitcoin (BTC) has been trading in a tight range since Nov. 24 as traders are unsure of the next directional move. Usually, in a bear market, analysts tend to become very pessimistic and project targets that tend to scare investors.
Bitcoin’s failure to kick off a strong recovery has led to several bearish targets, stretching as low as $6,000 on the downside.
Although anything is possible in a bear market, traders with a long-term view might try to accumulate fundamentally strong currencies in several tranches. Because a fund will only be confirmed in hindsight and trying to time it is often pointless.
In a bear market, not all currencies bottom out at the same time. Therefore, in addition to keeping an eye on the cryptocurrency market in general, traders should keep a close eye on their currencies of choice.
Cryptocurrencies that lead the market out of the bear phase generally tend to do well when a new bull market begins. Let’s look at the charts of cryptocurrencies that are trying to start a short-term bullish move.
BTC/USDT
Bitcoin has been consolidating between $15,588 and $17,622 over the past few days. The Relative Strength Index (RSI) has formed a bullish divergence, suggesting that selling pressure may be easing.
The relief rally could face stiff resistance in the zone between the 20-day exponential moving average ($17,065) and $17,622. If the price turns lower from the upper zone, the BTC/USDT pair could extend its range-bound stay for some more time.
If the buyers push the price above the overbought zone, this will suggest that the downtrend may be ending. The 50-day SMA ($18,600) can act as a minor hurdle, but if crossed, the move higher could reach the psychological $20,000 level.
On the other hand, if the price breaks away from the overhead resistance and breaks below $15.588, it could signal the resumption of the downtrend. The pair could then drop as low as $13,554.
The moving averages on the 4-hour chart have flattened out and the RSI is near the midpoint, indicating a balance between supply and demand. This balance could tip in favor of the bulls if they push the price above $17,000. Then the pair could rally to the overhead resistance of $17.622.
Instead, if the price slips below $16,000, the pair could fall to the critical support zone between $15,588 and $15,476. A break below this zone could accelerate the selling and start the next leg of the downtrend.
DOGE/USDT
Dogecoin (DOGE) broke above the overhead resistance of $0.09 on Nov. 25, but the bears pushed the price back below the level on Nov. 26. Buyers rallied and pushed the price above the 38.2% Fibonacci retracement level at $0.10 on Nov. 27.
The bears could again try to stop the rally near $0.10, but if the bears do not allow the price to break below $0.09, the DOGE/USDT pair could pick up momentum and rally towards the USD 61.8% Fibonacci level. 0.12. If this level is broken as well, the pair could continue its uptrend towards $0.16.
On the other hand, if the price turns down from the current level, it will suggest that the bears continue to view rallies as a selling opportunity. In that case, the pair could drop as low as $0.09. If this support gives way, the 50-day SMA ($0.08) could be touched.
The buyers have pushed the price above the range, which suggests the start of a bullish move. The strong rally pushed the RSI to overbought levels, suggesting a small correction or consolidation in the near term.
If the price turns down from the 38.2% Fibonacci retracement level at $0.10, but bounces from the breakout level, it will suggest that sentiment has turned positive and traders are buying at lower levels. The bulls will then try to resume the uptrend. The range breakout target is $0.12.
This positive view could be invalidated in the short term if the price turns lower and re-ranges. In that case, the pair could drop to the 50 SMA.
USDT/LTC
The break of Litecoin (LTC) above the overhead resistance of $75 is the first indication of a possible trend change. The bears tried to push the price back below $75 and trap the more aggressive bulls, but the buyers held their ground.
The bulls will try to push the price above the overhead resistance of $84. If they succeed, it could be the start of a new uptrend. The rising 20-day EMA ($67) and the RSI near the overbought zone indicate that the path of least resistance is to the upside. The LTC/USDT pair could then rally towards the $104 target.
On the other hand, if the price turns below $84, the pair could slide to the $73-$75 support zone. If this zone is broken, the pair could slide down to the 20 day EMA. The shorts will have to drag the price below this support to catch the more aggressive bulls.
If the price bounces off the 20-day EMA, the bulls will try again to break above $84 and start the uptrend.
The 4-hour chart shows that the price broke out and closed below the 20 EMA, but the bears were unable to take advantage of this. The bulls bought cheap and pushed the price back above the 20 EMA. Both moving averages are sloping up and the RSI is just above the midpoint, indicating that the buyers have a slight advantage.
There is a little resistance at $80, but if the bulls push the price above this level, the pair could rally as high as $84. The pair could then attempt a rally to $96. If the bears want to invalidate this short-term view , they will have to drag the price below USD 73.
LINK/USDT
Chainlink (LINK) has been range-bound between $5.50 and $9.50 for the past few weeks. The strong bounce from the $5.50 support on Nov. 21 suggests that the shorts are aggressively buying dips to this level.
The 20-day EMA ($6.74) has started to turn higher and the RSI has entered the positive territory, indicating a bit of an advantage for the bulls. If the price sustains above the 50-day EMA ($7.15), the probability of a rally to $8.50 and then $9.50 increases.
Contrary to this assumption, if the price turns lower and breaks below the 20 day EMA, it will suggest that the bears are active at higher levels. The LINK/USDT pair could then drop back towards the $5.50 support and consolidate near it for a few more days.
The strong bounce from the $5.50 level is approaching the overhead resistance of $7.50. If the price turns down from this level and breaks below the 20 EMA, the pair could drop to the 50 EMA. If it breaks below this support, the pair will stay between $5.50 and $7.50 for some time.
Another possibility is that the price turns down from $7.50 but bounces off the 20 EMA. The bulls will try again to push the price above $7.50 and start the march north, looking at $8.50.
APE/USDT
ApeCoin (APE) has been consolidating in a wide range between $3 and $7.80 for the past few months. The bears tried to sink the price below the range support but were unable to sustain the lower levels. This suggests strong demand at lower levels.
Sustained buying pushed the price above the 20-day EMA ($3.47) on Nov. 26, indicating that the bears are back. There is a bit of resistance at the 50-day EMA ($4.06), but if the bulls clear this hurdle, the APE/USDT pair could rally to the downtrend line.
If the price breaks away from the downtrend line, the pair could turn down to the 20-day EMA. If the pair bounces from this level, it will suggest that sentiment has shifted from selling on rallies to buying on dips. This could improve the prospects for a break above the downtrend line. The pair could then rally as high as $6.
Conversely, if the price turns away from the downtrend line and breaks below the 20-day EMA, the pair could slide back to the strong support of $3.
The moving averages on the 4-hour chart have started to rise and the RSI has entered the overbought zone, indicating that the bulls have a slight advantage. The rally could face resistance at $4, but if the bulls do not allow the price to drop below the moving averages, the move up could reach the downtrend line.
This positive view could be invalidated in the short term if the price turns lower and breaks below the 50-day SMA. This move will suggest that the bears continue to sell on rallies. The pair could then drop as low as $3.
Points of view and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.