Bitcoin (BTC) is up nearly 40% so far in January, the best start to the year since 2013. According to analyst Cole Garner, the sharp rise has turned several on-chain signals bullish.
Normally, a strong rally from the market lows, driven by the leader, is a sign that strong hands may be buying aggressively. This may be because traders believe the selling has been overdone in the short term or because they find the valuation attractive.
After the initial rise, expect a quick correction, which will shake up weak hands. The next drop will also confirm whether Bitcoin has bottomed out or not. If the bottom is confirmed, several altcoins could start to outperform Bitcoin in the short term.
Which altcoins are promising in the short term? Let’s study the charts of Bitcoin and some tokens to see which ones could extend their uptrend in the coming days.
BTC/USDT
Bitcoin has been trading above $22,800 since January 25, which suggests that the bulls are trying to turn this level into support.
The upward slope of the 20-day exponential moving average ($21,558) indicates that the bulls are in command, but the RSI in overbought territory suggests that the rally may be overextended in the near term.
If the buyers push the price above $23.816, the BTC/USDT pair could start its march north towards $25.211. This level can act as a formidable resistance.
On the downside, the 20-day EMA is an important level for bulls to defend, as if breached, the pair could drop to psychological support at $20,000.
On the 4-hour chart, the RSI shows a negative divergence. If the bulls want to reassert their dominance, they will need to break through the resistance at $23816. This would kick off the next leg up.
Conversely, if the price turns down from the upper resistance, the bears will try to drag the pair below the moving averages. There is a little support at $22,715, but if this level breaks down, the pair could retest $21,480.
USDT/LTC
Litecoin (LTC) has been in a strong uptrend for the past few days. After a brief consolidation, buyers pushed the price above the $92 resistance, indicating that the uptrend remains intact.
The LTC/USDT pair could rally to the psychological $100 level, where the bears could once again try to play tricks. If the bulls do not give up too much ground from this level, the pair could extend to $107. The rising 20-day EMA ($86) and RSI near overbought territory indicate advantage for buyers.
This positive view could be invalidated if the price turns lower and slides below the 20 day EMA. In that case, the pair could drop as low as $81 and then as low as $75.
The break and close above the $92 level suggests that the consolidation has been resolved in favor of the buyers. If the bulls sustain the price above $92, the pair could rally towards the pattern target of $98.
The bears probably have other plans. They will try to drag the pair below the breakout level of $92 and trap the bulls more. If they do, the pair could drop as far as $86. This is an important level for bulls to defend, as a break below could tip the advantage in favor of the bears.
AVAX/USDT
Avalanche (AVAX) broke above the resistance line on Jan. 27 and reached the upper barrier of $22 on Jan. 28.
The bears are trying to stall the rally at $22, but the bulls seem in no rush to take profits. This increases the probability of a break above the barrier. If this happens, the AVAX/USDT pair could accelerate towards $30. There is a bit of resistance at $24, but it is likely to be broken.
Another possibility is that the price goes down and retests the resistance line. If the price bounces from this level, it will suggest that the bulls have turned it into support. This could improve the prospects of breaking above $22. The bears could prevail if the price breaks below the 20-day EMA ($17).
On the 4-hour chart, the pair has pulled back close to the 20 EMA. If the pair jumps from the current level, the bulls will try again to push the pair above the upper hurdle at $22. If this level is broken , the pair could rally to $24.
The first sign of weakness will be a breakout and close below the 20 EMA. This way, the bears could return to the charge. The sellers could take the lead if they manage to hold the pair below the resistance line.
APT/USDT
Aptos (APT) has been on a dreamy run in recent days. Normally, when an asset picks up momentum, it continues to move in the same direction for some time.
The APT/USDT pair pulled back from $20.40 on Jan. 26, but the bulls are trying to stop the pullback at $16.62. The bulls are buying every little pullback. The buyers will try to push the pair above $20.40 and start the next leg of the uptrend. The pair could reach $24.
The risk to this assumption is that the RSI has been in the overbought territory for the past few days. This increases the risk of a short-term correction. If the price turns lower and falls below $16.60, the pair could slide as far as $14.57 and then down to the 20-day EMA ($12.23).
The 4-hour chart shows a negative divergence on the RSI. If the pair breaks below the 20 EMA, the pair could touch the 50 EMA. This is important support to watch as if it is broken, the pair could drop as low as $12.
Conversely, if the price turns higher and breaks above $20.40, it will indicate that the bulls have reasserted their supremacy. That could invalidate the developing negative divergence on the RSI and resume the uptrend.
FTM/USDT
Fantom (FTM) has been on a great run since breaking above the downtrend line. The strong rally of the last few days suggests aggressive buying by the bulls.
Indicators are signaling that the bulls are firmly in control. During strong rallies, corrections are short-lived as bulls buy every small dip. The bears are trying to halt the rise near the psychological resistance of $0.50, but if the bulls break above this level, the FTM/USDT pair could shoot as high as $0.56 and then as high as $0.63.
Sometimes vertical rallies are followed by sharp declines. Therefore, traders should be careful, as a break and close below $0.43 could sink the pair down to the 20-day EMA ($0.37). This is the key level to watch on the downside, as a break below could indicate that the uptrend may be over in the short term.
The pair pulled back from the $0.50 overhead resistance but found support at the 20 EMA. This indicates that sentiment remains positive and traders are buying dips. The bulls will once again try to clear the upper hurdle at $0.50 and resume the move higher.
The bears may have other plans, as they will try to push the price below the 20 day EMA. This is an important level to keep an eye on in the near term as a break below it could open the doors for a possible drop to the 50-day SMA. If this level is broken as well, the next stop could be $0.36.
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