Bitcoin’s price (BTC) has continued to hover between $ 30,000 and $ 40,000 for the past few days, which isn’t exactly a bearish sign.
In general, after a sharp drop, price tends to consolidate as the asset moves from weaker hands to stronger hands. After the transition is complete, the asset breaks out and begins a new uptrend. Usually, the longer the price consolidates in a range, the stronger the next trend movement.
Mike McGlone, chief commodities strategist for Bloomberg Intelligence, said Saturday that Bitcoin’s declining supply was a positive sign that could act as a “bullish ace” for its upward climb “if past patterns persist”.
Yoni Assia, CEO of eToro, also told Cointelegraph that Bitcoin could see a sharp surge in the next three to five years “as there are still 5 billion people in the world who basically don’t have good local currency”.
Connected: Bitcoin Price Could Reach $ 85,000 In Months As Indicators Turn Bullish – Report.
Investors should therefore not be discouraged by the subdued price development in the short term. Bitcoin’s fundamentals remain strong and are likely to fuel a new uptrend in the future.
As the crypto markets consolidate, we analyze the charts of the top 5 cryptocurrencies that could outperform in the next few days.
BTC / USDT
Bitcoin turned away from the resistance line of the descending triangle on Jan. 12, breaking below the 20-day exponential moving average ($ 36,586). This suggests that the bears are aggressively defending the resistance line.
The longer the price stays below the 20-day EMA, the greater the likelihood of falling to the lower levels. If bears drop the price below $ 34,600, the BTC / USDT pair could drop to $ 33,400 and then to $ 31,000.
A break and close below $ 31,000 completes a descending triangle pattern that has a target at $ 19,549. However, a direct decline to the lower levels is unlikely to occur as the bulls will attempt to stem the decline in the $ 31,000 to $ 28,000 support zone.
This negative view will be invalidated if the price continues to move higher and rise above the resistance line of the triangle. Such a move could open the gates for a rise to the 50-day simple moving average ($ 44,709), which in turn is likely to act as a rigid resistance.
A break above the 50-day SMA suggests that the correction may be over and the bulls will gradually try to initiate a new bullish move.
The moving averages on the 4-hour chart have crossed and the relative strength index (RSI) is just above the middle, suggesting that the bulls are headed for a comeback.
A breakout and close above the resistance line of the triangle signals that demand exceeds supply. If the bulls hold the price above the triangle, a new upward move could begin.
Alternatively, if price turns down from the resistance line and falls below $ 34,000, it could signal a small advantage to the bears. That could push the price down to the critical support at $ 31,000. A rebound from this support will indicate accumulation at lower levels and that could keep the pair in the triangle for some time to come.
AAVE / USDT
Aave has traded in a wide range between $ 280 and $ 581.67 for the past few months. The bulls have successfully defended range support five times previously, so buyers are likely to buy the dip again.
If the price rallies with strength from current levels, it will indicate that the bulls will continue to accumulate on dips. Buyers will then attempt to push the price above the 20-day EMA ($ 344). If this succeeds, the AAVE / USDT pair could climb to the 50-day SMA (USD 414), which could act as a severe hurdle.
If the price deviates from the 50-day SMA, the pair could consolidate between $ 280 and $ 414 for a few days. On the contrary, a break above the 50-day SMA will clear the way for a march north toward $ 581.67.
This positive view will be invalidated if the price deviates from the 20-day EMA and falls below the USD 280 support. That will encourage the bears, who will then try to push the price down to $ 208.09 and then to $ 160.
The 4-hour chart shows that the bears pulled the price below $ 280 but are struggling to sustain the lower levels. However, the moving averages are sloping down and the RSI is in negative territory, indicating an advantage for the bears.
If the price turns down from current levels and drops below $ 266.68, the pair could begin its downtrend. This negative view will be invalidated if the bulls push price above the downtrend line. Such a move suggests that the correction is over and then the pair could rise to $ 500.
KSM / USDT
Kusama (KSM) has seen volatile movements in the past few days. Although the bulls pushed the price above the overhead resistance of $ 480 on June 9th, they failed to hold the higher levels and the price fell back below the level on June 10th. This shows that bears sell in rallies.
However, buyers have not allowed the price to drop below the 20-day EMA ($ 388). This suggests that sentiment will turn positive as the bulls buy the breaks from the 20-day EMA.
The rising 20-day EMA and the RSI near the middle point to a small advantage for the bulls. Buyers will now make another attempt to push the price above $ 480. If successful, the KSM / USD pair could rise to $ 537 and then retest the all-time high at 625.
This positive view will be invalidated if the price drops from current levels or overhead resistance and falls below $ 360. That could push the price down to $ 280.
The 4 hour chart shows that the bulls are trying to defend trendline support. However, the 20-EMA has turned down and the RSI is in negative territory, suggesting that the bears have the upper hand.
If sellers cut the price below $ 380, the pair could drop to $ 342. A break below this support could pull it back down to $ 280.
This negative view will be invalidated if the bulls can push the price above $ 429. That could attract buying and push the pair down to $ 480.
ALGO / USDT
Algorand (ALGO) bounced off the trendline on June 12, rising above the 20-day EMA ($ 0.97), suggesting that the bulls will buy on dips. The flat 20-day EMA and the RSI near the middle suggest that selling pressures have eased.
The price action of the past few days has formed an ascending triangle pattern that completes on a breakout and closes above $ 1.15. If the bulls manage to keep the price above $ 1.15, the ALGO / USDT pair could hit the target at $ 1.63.
Contrary to this assumption, the pair can add a few more days to their stay within the triangle if the price drops from $ 1.15. A breakdown and close below the trendline will ruin the bullish view and open the gates for a decline to $ 0.80 and then $ 0.67.
The 4 hour chart shows that the bulls are trying to push the price above the downtrend line. If they can sustain the breakout, the pair could rise to $ 1.15. A breakout and close above this resistance could trigger a new uptrend.
Conversely, if the price drops from current levels and falls below the moving averages, the bears will make another attempt to bring the price below the trendline. If they are successful, this will signal the beginning of a deeper correction.
TFUEL / USDT
Theta Fuel (TFUEL) rose to a new all-time high of $ 0.679 on June 9, but the bulls were unable to hold the higher levels, as evidenced by the long wick on the daily candle. This was followed by a sharp pullback to the 20-day EMA ($ 0.41) on June 12th.
The strong rebound from the 20-day EMA shows sentiment is positive and traders buy aggressively on dips. The bulls will now attempt to push the price down to the all-time high, where they are likely to encounter strong resistance from the bears.
If the price drops from its all-time high, the bears will make another attempt to pull the price below the 20-day EMA. If successful, it will suggest the beginning of a deeper correction.
Alternatively, if buyers drive price above the all-time high, the TFUEL / USDT pair could continue the uptrend with the next target at $ 0.85 and then $ 1.
The 4-hour chart shows the pair rebounded strongly from the USD 0.40 support, suggesting accumulation at lower levels. However, the relief rally faces resistance just below the 61.8% Fibonacci retracement level at $ 0.57.
This suggests that the bears have not given up and are selling on rallies. If the price falls below the 20 EMA, the bears will try to push the price down to $ 0.40. In this case, the pair can consolidate between these two levels for a few days.
Alternatively, if price rebounds from the 20-EMA, it indicates that sentiment is positive and the bulls are not waiting for a deeper drop to buy. That increases the likelihood of a breakout above $ 0.57. The pair could then rise to retest the all-time high.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every step of investing and trading involves risk, so you should do your own research when making a decision.