Bitcoin’s tight consolidation near $25,000 suggests that bulls are holding onto their positions in anticipation of a breakout to a fresh 2023 high.
Bitcoin (BTC) is up more than 11% last week and is trading near the fundamental resistance of $25,000. In his latest update, tracking resource Material Indicators highlighted that high-volume traders were “thinning” overhead resistance, which could trigger a rally. As prices rise, retail traders could get dragged down and whales could use this opportunity to sell their accumulated positions at lower levels.
Every uptrend suffers several setbacks and Bitcoin is no exception. However, the price action of the past few months shows a great underlying pattern, which may be about to break out. If this occurs, Bitcoin will signal a possible trend change.
There are very few occasions when all the indicators turn bullish. If traders continue to wait for that to happen, they may miss out on much of the rally. Therefore, it is best to closely watch the price action and trade according to one’s money management principles. Typically, successful strategies are simple and easy to follow.
Could Bitcoin and some altcoins continue to outperform US equity markets in the short term? Let’s study the graphs to find out.
SPX
The S&P 500 Index (SPX) bounced off the 20-day exponential moving average (4,080) on Feb. 10, but the bulls were unable to push the price to the 4,200 overhead resistance.. This emboldened the bears, who pulled the price back below the 20-day EMA on the 17th of February. One small bright spot for the bulls is that the lower levels attracted strong buying, as seen in the long tail of the day’s candle.
The 20 day EMA is flattening out and the RSI is near the midpoint, which suggests a few days of consolidation. The index could swing between the uptrend line and 4,200 for some time.
Trading within a range is often volatile and random. If the bulls push the price above 4,200, the index could resume its uptrend. There is resistance at 4,300, but if the bulls do not allow the price to fall back below 4,200 during the next correction, the index could go as high as 4,500 points.
Conversely, if the price turns down and falls below the uptrend line, the index could drop as low as 3.764.
DXY
The US Dollar Index (DXY) broke out and closed above the wedge pattern on February 16. The moving averages are about to complete a bullish crossover and the RSI is near 57, indicating that the bulls are trying to rally.
However, bears are unlikely to give up easily. They will try to push the price back below the moving averages and catch the aggressive bulls. If they do, the index could fall first to 102.58 and then to 101.29.
Conversely, if the bulls do not allow the price to break below the moving averages, this will suggest that dips are being bought. So, The index could start a relief rally to the 38.2% Fibonacci level of 105.52 and thereafter to the 50% Fibonacci level of 106.98.
BTC/USDT
Bitcoin has been trading near the strong resistance at $25,211 for the past four days. Although the bears have successfully defended the level, the bulls have not given up. They seized the opportunity again on February 20 and bought at lower levels.
In general, a consolidation near strong overhead resistance breaks to the upside. The bullish moving averages and the RSI above 65 also indicate that the bulls are in control. If the price breaks out and sustains above $25,250, the BTC/USDT pair could pick up momentum. There are no major resistances until $31,000, so this run could be covered before long.
The first support is found at the 20-day EMA ($23,218) and then at $22,800. The sellers will have to quickly drag the price below this support to weaken the upside momentum. The pair could fall as low as $21,480.
ETH/USDT
Buyers pushed Ether (ETH) above the $1,680 resistance on Feb. 17 and thwarted attempts by the bears to push the price back below the breakout level.
The bullish moving averages and the RSI in the positive zone indicate that the path of least resistance is to the upside. The ETH/USDT pair could rally to $1,800 first and then continue its path towards the next resistance at $2,000. The sellers are expected to fiercely defend the $2,000-$2,200 zone.
This bullish view could be invalidated in the short term if the price turns lower from the current level and breaks below $1,460. Then, the pair could drop to the strong support at $1,352.
BNB/USDT
The sellers are trying to defend the $318 resistance but the bulls have not allowed the BNB (BNB) price to sustain below the moving averages.. This suggests that the lower levels are attracting buyers.
The price has been holding on to the $318 resistance for the past two days, raising the possibility that it could be broken above.
If this happens, the BNB/USDT pair could rally to the neckline of the inverse head and shoulders (H&S) pattern, where the bears could again erect a strong barrier. If the buyers break through, the pair could rally as high as $360 and then continue its path towards $400.
The bears will have to sink and hold the price below the 50-day SMA ($300) to keep its chances of initiating a deep correction alive.
XRP/USDT
The XRP (XRP) price has been falling in a descending channel pattern. The 20-day EMA ($0.39) is flat, but the RSI has risen above 54, which indicates that the bulls are trying to start a rally.
If the price rises and sustains above the resistance line of the channel, the XRP/USDT pair can initiate a rally towards the crucial $0.43 upper level.. A break and close above this level could open the doors for a possible rally to $0.51.
Conversely, if the price turns down from the current level and sustains below the moving averages, it will suggest that the bears are not willing to give up without a fight. The pair could drop to $0.36 first and then to the support line of the channel.
ADA/USDT
Cardano (ADA) is between the neckline and the 20-day EMA ($0.38). This narrow trading range suggests that the bulls are buying the dips to the 20 day EMA as they anticipate a move to the upside.
The bullish moving averages and the RSI in positive territory indicate that the bulls have the upper hand. The breakout and close above $0.42 will complete a bullish Inverse H&S pattern. This setup could attract new buying and push the price towards $0.50. The target of this reversal pattern is $0.60.
On the other hand, if the pair turns down and breaks below the 20 day EMA, the bears will have a chance to come back. The pair could fall towards the strong support of $0.34.
MATIC/USDT
Polygon (MATIC) is in a strong uptrend. The bears tried to stall the rally near $1.57, but the shallow pullback suggests that the bulls are not rushing out.
If the price rallies from the current level and breaks above $1.57, the uptrend could resume.. The MATIC/USDT pair could reach $1.70. This level is likely to act as a major hurdle, but if the bulls break above this level, the pair could continue its march north and reach towards $2.10.
The first major support on the downside is the 20 day EMA. The sellers will have to pull the price below this support to stop the bullish momentum. The pair could then start a deeper correction towards $1.13.
DOGE/USDT
The bulls and the bears are fighting a tough battle near the moving averages. One small positive is that buyers have not allowed Dogecoin (DOGE) to stay below the 50-day SMA ($0.08), which indicates demand at lower levels.
The 20-day EMA ($0.09) has started to gradually turn up and the RSI is just above the midpoint, indicating that the bulls have a slight advantage. If the buyers push and hold the price above $0.09, the DOGE/USDT pair could rally as high as $0.10 and $0.11 thereafter. This level can act as significant resistance, but if it is crossed, the next stop could be $0.15.
To the downside, the $0.08 level acts as strong support. Any break of this level could trigger a retest of the crucial support at $0.07.
SOL/USDT
The resistance line at Solana (SOL) has acted as a major hurdle on three previous occasions, therefore a breakout and close above it will be the first indication that the downtrend may be ending.
If the price sustains above the resistance line, the SOL/USDT pair could rally to $39, where the bears could mount a strong defense again. If the bulls turn the resistance line into support during the next pullback, the chances of the pair reaching $50 will increase.
Bassists are running out of time. If they want to regain the upper hand, they will have to quickly stop the move higher and push the price back below the $19.50 support. If they do, the pair could drop as low as $15.
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