If Bitcoin breaks above $45,500, some altcoins like NEAR, ATOM, FTM, and FTT could turn bullish in the short term.
Bitcoin (BTC) has stopped its decline and is attempting to recover along with selected altcoins. Some traders feared a Bitcoin sell-off, but Capriole CEO Charles Edwards said Bitcoin’s worst declines occurred “because of miner capitulation (December 2018 and March 2020), when BTC fell below production costs”. However, the current production cost of Bitcoin was $34,000, which is well below the current price.
In a sign that institutional investors remain bullish on the crypto sector even after the recent crash, Cathie Wood’s Ark Invest bought 6.93 million shares of the special buyout acquisition company set to merge with Circle, the main operator of USD Coin (USDC) and the second largest stablecoin in terms of market capitalization.
Another sign that crypto markets are maturing is the fact that non-fungible tokens (NFTs) have not responded negatively to the cryptocurrency price decline. A recent report by DappRadar said that NFT trading in the first ten days of 2022 generated $11.90 billion compared to $10.7 billion in the third quarter of 2021.
Could Bitcoin continue its recovery and drive selected altcoins higher? Let’s study the charts of the top 5 cryptocurrencies to find out.
BTC/USDT
The bulls are struggling to push Bitcoin above the 20-day exponential moving average ($44,415) for the past few days, but a minor silver lining is that the buyers have not given up much ground. This suggests that the bulls are buying every minor dip.
If the buyers push and hold the price above the 20-day EMA, it will indicate a possible change in trend. The BTC/USDT pair could then rally to the 50-day SMA ($47.987) where the bears can once again mount a strong resistance. A breakout and close above this resistance could clear the way for a rally to $52.088.
Contrary to this assumption, if the price fails to break above the 20-day EMA, it will suggest that the sentiment remains negative and traders are selling on the rallies. Afterwards, the bears will try to sink the price below the critical support at $39,600. If they are successful, the pair could extend its downtrend.
The moving averages have flattened out and the RSI is just above the midpoint on the 4-hour chart. This suggests a range-bound action in the short term. The pair could remain stuck between $39,600 and $45,456.
A breakout and close above $45.456 could tip the advantage in favor of the bulls, signaling the start of a potential rally to $52.088. Alternatively, a breakout and close below $39,600 could signal a resumption of the downtrend.
NEAR/USDT
NEAR Protocol’s NEAR token is in a strong uptrend. The price broke through the previous all-time high of $17.95 on Jan 11, signaling the resumption of the upward move. The bears pushed the price below $17.95 on Jan 12, but the bulls bought this drop and reclaimed the level on Jan 13.
Both moving averages are sloping up and the RSI is in the positive territory, indicating that the path of least resistance is to the upside. If the bulls do not allow the price to drop below the breakout level of $17.95, the NEAR/USDT pair could rally to $25.44.
Alternatively, if the bears break the price below $17.95, the pair could drop to the 20-day EMA ($16.42). A bounce off this level could keep the uptrend intact, but a break and close below it will suggest traders are rushing out. The pair could then drop to $13.
The 4-hour chart shows that the price has been taking support at the 20-day EMA. The rising moving averages and the RSI in positive territory indicate that the short-term trend favors the buyers.
If the bulls propel the price above $20.59, the uptrend could start. The pair could then rally to $22 and then $25.
Contrary to this assumption, if the price breaks below the 20-day EMA, it will indicate that short-term traders may be making profits. The pair could then drop to the 50-day SMA. A break and close below this support will signal the start of a deeper correction.
ATOM/USDT
Cosmos (ATOM) is attempting to form an inverse head and shoulders pattern, which will complete on a breakout and close above the overhead resistance at $44.80.
The rising moving averages and the RSI in the overbought territory indicate that the path of least resistance is to the upside. A close above $44.80 could open the doors for a rally to the psychological level at $50 and then towards the pattern target at $69.42.
Alternatively, if the price turns down from the overhead resistance, the ATOM/USDT pair could drop to the 20-day EMA ($36). This is a key level for the bulls to defend. If the price bounces off this level, the bulls will try again to push the pair above the overhead resistance and resume the uptrend.
A breakout and close below the 20 day EMA will be the first sign that the move up might be running out of steam. The pair could then drop to $32.90.
The 4-hour chart shows that the price has broken out of the symmetrical triangle pattern, indicating that the uncertainty has been resolved in favor of the buyers. The bears may try to defend the overhead resistance at $44.80, but if they fail, the pair could rally to the pattern target at $51.19.
Alternatively, if the bears successfully defend the resistance at $44.80, the pair could drop to the 20-day EMA. If the price bounces off this support, the bulls will once again try to break through the overall hurdle. This positive view will be nullified on a breakout and close below the 50-SMA.
FTM/USDT
Fantom (FTM) is in a strong uptrend. The price action of the past few days has formed an inverse (IH&S) which will complete on a breakout and close above $3.17.
The bears may try to stop the rally at $3.48, but if the bulls push the price above this level, it could start the next leg of the uptrend. The up move could first reach $4 and then continue its journey towards the pattern target at $5.11.
Contrary to this assumption, if the price turns down from the overhead resistance, the bears will try to push the FTM/USDT pair to the 20-day EMA ($2.62). If the price breaks up from this level, it will suggest that the sentiment is still positive and traders are buying the dips.
However, a break and close below this support will signal the start of a deeper correction of the 50-day SMA ($2.07).
The bears tried to stop the move up at $3.17 but the bulls had other plans. They bought the dip to the 20-day EMA and have pushed the price above the overhead barrier. If the bulls sustain the price above the breakout level, it will signal the resumption of the uptrend.
On the other hand, if the bears break the price below $3.17, the pair could drop to the 20-day EMA. This is an important level to watch because a break and close below it could indicate that the current breakout may have been a bull trap. The pair could then drop to $2.80 and then to the 50-day EMA.
FTT/USDT
FTX Token (FTT) has been in a strong corrective phase for the past few weeks. The bulls pushed the price above the downtrend line on Jan 14, signaling a possible trend reversal.
The moving averages are on the verge of a bullish crossover and the RSI has risen above 64 after forming a positive divergence. This suggests that the bulls are trying to come back. If the price sustains above the downtrend line, the FTT/USDT pair could rally to $53.50.
Contrary to this assumption, if the price turns down from the current level and breaks below the moving averages, it will suggest that the breakout was a bull trap. That could drop the price to $33.76. A breakout and close below this support could open the doors for a potential drop to $24.
The 4-hour chart shows the formation of a falling wedge pattern. The buyers pushed the price above this pattern and also cleared the horizontal resistance at $45.07.
Both moving averages are sloping up and the RSI is in the overbought zone, which indicates that the bulls have the upper hand. If the bulls sustain the price above $45.07, the pair could start its march towards the psychological resistance at $50.
This positive view will be invalidated if the price turns down and re-enters the wedge. Such a move will indicate that demand dries up at higher levels.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.