The crypto market has been in a strong bull run over the past few days, and that has pushed Bitcoin (BTC) to its second-best day ever. Almost every trader now seems to be fixated on the magical figure of $20,000 per BTC.
After such a sharp up-move, some traders are calling for a top, while others are projecting lofty targets for the future.
CNBC Fast Money host Brian Kelly, for example, believes that the recent volitile moves in altcoins, overpriced Bitcoin address growth, and rising funding rates pointing to the arrival of retail traders may be a warning sign of a short to medium-term top.
On the other end of the spectrum are analysts such as Off the Chain Capital chief investment officer Brian Estes who believes that Bitcoin could rally to $100,000 in one year, and even better, to $288,000 by the end of 2021.
Another bullish view was projected by Gold Bullion International co-founder Dan Tapiero, who opined that Bitcoin could rally to “somewhere between $300,000 and $500,000” in the next five years.
During a bull cycle, it is very easy to get sucked into making hasty decisions. Actions taken due to greed could wipe out the trading account, especially if traders use excessive leverage in a volatile market. Therefore, traders should stick to their trading strategies and mitigate risk.
After the vertical rallies of the past few days, is there more steam left, or is it time for a correction? Let’s analyze the top 10 cryptocurrencies to find out.
Bitcoin (BTC) broke the $19,000 barrier on Nov. 24 and is trying to inch higher toward the $20,000 mark. The formation of a Doji candlestick pattern today suggests hesitation among the bulls to buy aggressively at the current levels.
However, the positive thing is that the bulls have not allowed the price to correct, even to the 20-day exponential moving average ($17,095), since the uptrend started on Oct. 8. This shows that the bulls are buying on every minor dip.
Due to this incessant buying, the relative strength index (RSI) has remained in the overbought zone since Oct 21. The bears may try to stall the rally before the $20,000 level, but unless they sink the price below the 20-day EMA, the bulls remain in control.
If the BTC/USD pair rises above $20,000 without a meaningful correction, then it may continue vertically, before turning around sharply. In a market with strong bullish momentum, it is foolhardy to call a top.
The frenzied buying usually signals a top, but before the reversal happens, it also offers the best periods to make money to the prudent trader.
Therefore, traders can book partial profits at stiff resistances and protect their remaining positions with a trailing stop-loss order to protect their paper profits.
Ether (ETH) is facing profit-booking near the stiff overhead resistance at $625. However, the shallow correction shows that the bulls are not closing their positions in a hurry. The bulls may again attempt to push the price above $625 in the next few days.
If they succeed, the ETH/USD pair could start its journey to the next major resistance at $800. The upsloping moving averages and the RSI in the overbought zone suggest that bulls are in command.
However, if the ETH/USD pair turns down from the overhead resistance, the bears may sink the pair to the 38.2% Fibonacci retracement level at $526.348, and a deeper correction could extend the decline to the 50% retracement level at $496.552.
XRP price soared to an intraday high at $0.780574 on Nov. 24 from a low of $0.227813 on Nov. 3, which is a 242% rally within a short time. Such vertical rallies are not sustainable. The long wick on the Nov. 24 candlestick shows profit-booking at higher levels.
The RSI above 91 suggests that the markets are overheated in the short term and need to cool off. However, the long tail on today’s candlestick shows that bulls continue to buy at lower levels in anticipation of a further up-move.
If the XRP/USD pair rallies above $0.780574, the uptrend could enter a blow-off phase and reach $0.96. However, if the price turns down from the overhead resistance, the pair may remain range-bound for a few days.
Bitcoin Cash (BCH) rallied hard on Nov. 23 and 24 and broke above the $353 resistance, but the bulls could not sustain the higher levels. The long wick on the Nov. 24 candlestick shows profit-booking at higher levels.
The bulls again pushed the price above $353 today but are finding it difficult to sustain the higher levels. This could start a correction to the 38.2% Fibonacci retracement level at $324.13, then to the 50% retracement level at $309.44.
A shallow correction will suggest that traders are not booking profits aggressively and fresh buyers are not waiting for a large correction to get in. That will increase the possibility of a resumption of the uptrend to $420, then to $500.
Chainlink’s LINK has been sustaining above the neckline of the inverse head-and-shoulders pattern for the past few days but has failed to pick up momentum. This increases the possibility of a retest of the breakout level at $13.28.
A strong rebound off $13.28 will flip it to support and could start the next leg of the up-move, which may take the LINK/USD pair to $18, then to $19.2731. The upsloping moving averages and the RSI in the positive territory suggest bulls have the upper hand.
This bullish view will be invalidated if the bears sink the price below $13.28. Such a move would suggest that the current breakout was a bull trap. A break below the 50-day simple moving average ($11.96) will tilt the advantage in favor of the bears.
Litecoin (LTC) once again closed above $84.3374 on Nov. 23. However, the Doji candlestick pattern on Nov. 24 shows indecision among the bulls and the bears. This indecision has resolved to the downside today.
The bears are currently attempting to sink the price back below the breakout level of $84.3374. If they succeed, the LTC/USD pair could drop to the 20-day EMA ($74).
If the pair rebounds strongly off the 20-day EMA, the bulls will once again attempt to resume the uptrend by pushing the price above $93.9282. If they manage to do that, a retest of $100 will be in the cards.
Conversely, a break below the 20-day EMA would suggest that the bullish momentum has weakened.
Cardano’s ADA surged above the $0.155 resistance on Nov. 24 and hit an intraday high at $0.1826315. However, the long wick on the day’s candlestick shows profit-booking by traders at higher levels.
The bears attempted to pull the price back below the breakout level at $0.155 today, but the long tail on the candlestick shows traders are buying on dips.
The ADA/USD pair has formed an inside day candlestick pattern today, which suggests indecision among the bulls and the bears. This could result in a consolidation for a few days before the next trending move starts.
If the bulls can propel the price above $0.20, the pair may rally to $0.24, then to $0.28. If both these levels are crossed, the rally could extend to $0.40. This bullish view will be invalidated if the price dips and sustains below $0.155.
The bulls are having a tough time sustaining Polkadot’s DOT above the $5.5899 level. Although the bulls pushed the price to $6.0857 on Nov. 24, they could not sustain the higher levels.
The bears are currently attempting to sink and sustain the price back below $5.5899. If they succeed, the DOT/USD pair could drop to the 20-day EMA ($4.98).
If the price rebounds off this level, the bulls will once again try to push the price above $6.0857. If they succeed, a rally to $6.8619 will be on the cards. The upsloping 20-day EMA and the RSI in the positive territory give the advantage to the bulls.
Contrary to this assumption, if the bears sink the price below the 20-day EMA, the pair could spend some more time inside the range.
Binance Coin (BNB) broke above the $32–$33.3888 resistance zone on Nov. 24, but the bulls are struggling to build upon this strength. The bears are currently attempting to pull the price back below $32.
If the price rebounds off $32, the BNB/USD pair could resume its up-move towards the target objective of $38.3348, which is just below the all-time high at $39.5941.
Contrary to this assumption, if the bears succeed in sinking the price back below $32, it may catch off guard the aggressive bulls who have purchased the breakout. If the price sustains below $32, the pair may remain range-bound for a few more days.
The sharp rally of the past few days has pushed the RSI above the 92 level. Usually, such deeply overbought levels are not sustainable, and traders can expect a correction to start in the next few days.
A vertical rally is usually followed by a sharp correction. The first support on the downside is the 38.2% Fibonacci retracement level of $0.17513. The bulls are likely to buy this dip aggressively, and the XLM/USD pair could remain volatile for the next few days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
TomoChain Launches LuaSwap: Attempts to Fight High ETH Gas Fees
Ever since last summer, the DeFi space is booming. The total value locked in various protocols has surged to more than $24 billion, up some 4000% in less than a year. But there’s one challenge that many believe is hampering the further growth of the space – sky-high ETH gas fees.
The Booming DeFi Space
The massive increase in popularity of decentralized finance (DeFi) led to the creation of hundreds of projects, each one battling to garner the user’s trust. One of the more successful ones is Uniswap – an automated market maker and a decentralized exchange for ERC20 tokens. This, however, created an issue.
Ethereum’s suffering from congestion: with so many apps and people using the network, gas fees are high and transactions can be slow. In fact, gas fees have been so high lately that many started to question whether DeFi is actually only profitable for larger holders.
TomoChain proposes a solution to this with its Proof of Stake Voting (PoSV) consensus algorithm which incentivizes all token holders to be active in staking across a network of over 150 Masternodes. In essence, the goal is to help Ethereum’s network function more efficiently.
Put simply, LuaSwap is a coin-swapping platform which enables users to trade various cryptocurrencies. The main benefit of using it compared to other similar solutions such as Uniswap or SushiSwap, for instance, is that it’s cheap – it runs on TomoChain, not on Ethereum.
The promise is for near-zero gas fees and quicker transactions thanks to the 2-second block confirmation and the ability of TomoChain to handle up to 2,000 transactions per second.
It’s worth noting that the fees on Ethereum’s network have been so high lately, that they’ve eclipsed Bitcoin’s network by a factor of 3x. Over the past seven days alone, Ethereum saw around $10 million in fees, while Bitcoin’s network – only about $3 million. Interestingly enough, Uniswap’s V2 lines up third with $2.4 million in weekly fees.
Polkadot, Ethereum Classic, Maker Price Analysis: 27 December
Polkadot moved below its $16.05-support level, with its indicators highlighting more bearishness for the price over the coming trading sessions. Other altcoins such as Ethereum Classic and Maker moved within fixed channels on their charts and awaited further cues from market leaders BTC and ETH.
The world’s fourth-largest cryptocurrency, Polkadot was trading at $15.7, at press time, down by 8.6% in 24 hours. The fall was a sign of the selling pressure that gripped the market since the price was unable to break above the $18.9-resistance. On the charts, the candlesticks moved below the 20-SMA (yellow) and 50-SMA (blue) and signaled a bear market for DOT. Moreover, the indicators suggested that the bearish momentum was on the up and that the price could move lower on the charts.
The Awesome Oscillator’s red bars rose in length below zero and so did the red bars on the MACD’s histogram.
Ethereum Classic [ETC]
Ethereum Classic moved rangebound between $7.74 and $7.06 as a lack of strong momentum prevented a breakout in either direction. Low trading volumes and limited buying activity also accentuated the crypto’s recent price action. An extended bearish scenario could see the price fall below its immediate support level and move towards the $6.2-support. On the other hand, a bullish outcome would see the price rise towards the $8.3-resistance level.
The Relative Strength Index stabilized just above the oversold zone and outlined the bearish nature of the crypto’s price.
The Chaikin Money Flow suggested that capital inflows into the market were beginning to recover on the charts.
Maker was trading within a channel of $1,490.60 and $1,325.90, at press time, continuing its trend over the past five days. While it looked like the bears were about to flip the press time support, some bullish activity was recorded in the last trading session. However, a further pullback in the broader market could see the price head lower towards $1,153.4, while a bullish scenario could see a rise towards the immediate resistance.
The Bollinger Bands suggested low volatility in the price as the bands were compressed.
Finally, the Awesome Oscillator was bearish-neutral, but the momentum was weak.
Chainlink Price Analysis: 27 January
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Chainlink‘s price was highlighting the promise of a surge, one that could range anywhere between 18% to 40% over the next month. This surge will be pivotal to the project’s prospective listing by the Grayscale Investment company. It should be noted though that while the rumor got some credibility recently, Grayscale hasn’t announced the listing of these assets yet.
At press time, LINK was trading at $21.42 with a market cap of $8.6 billion, with the altcoin ranked the seventh-largest cryptocurrency on CoinGecko. After recording a 3.2% surge over the previous week, the oracle platform token might be witness to yet another surge soon.
Chainlink 6-hour chart
The attached chart highlighted that Chainlink was in a massive bearish ascending parallel channel pattern. The price got close to hitting the upper trendline, but failed after two tries. However, these attempts were what pushed LINK past its previous ATH and towards the new ATH at $25.8. Since hitting the new ATH, LINK’s price has seen a pullback down towards the lower trendline of the parallel channel, where it stood at press time.
Not only was the price being supported by the lower trendline of the channel, but the short-length EMA [yellow] was also preventing the price’s collapse. Hence, the price seemed to be primed for a bounce.
Adding more credibility to this bounce were the RSI and the Stochastic RSI, with both underlining a dip towards the oversold zone and loss of downward momentum. Finally, the MACD indicator was well below zero on the 6-hour chart, showing no signs of heading higher.
Overall, LINK’s price looked bearish on the charts, but considering the aforementioned supports, the bullish scenario also makes sense. There are two scenarios as to how the price could evolve.
In the first scenario, the price will bounce from the lower trendline of the channel or the mid-length EMA [blue] and head higher. This uptrend will have the potential to push the price up by 18% to 40% to $25.8 and $30.8, from where the price stood at press time.
A continuation of the downtrend after closing below the lower trendline would push the price down to $19.4 or $18.2, a development that would mean a 10% to 15% drop from the press time price.
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