Bitcoin’s eight-week winning streak is expected to come to an end as the price has dropped nearly 4% this week. While this decline could be attributed to profit-taking by traders, it does not alter the short-term upward trend. Furthermore, this pullback may help reduce any excessive speculation that may have been building up.
However, it is anticipated that strong investors will re-enter the cryptocurrency market after this initial shakeout, as the overall macroeconomic environment remains favorable for risk-assets. The Federal Reserve’s decision to pause rate hikes and potentially reduce rates in 2024 could further boost demand for crypto products.
Nevertheless, it is important to note that nothing rises in a straight line. After significant rallies, traders typically book profits and shift their focus to other cryptocurrencies. As Bitcoin takes a breather, traders are likely to divert their attention to select alternative coins.
So, which coins are likely to attract buyers in the short term? Let’s examine the charts of the top five cryptocurrencies that show promise.
Bitcoin Price Analysis
Bitcoin is currently caught between the 20-day exponential moving average ($41,370) and a downtrend line, indicating the potential for a sharp breakout in the next few days.
If the price falls below the 20-day EMA, the bears may seize the opportunity and attempt to push the BTC/USDT pair towards the strong support at $37,980. However, it is expected that the bulls will fiercely defend this level. If the price rebounds from $37,980, it will likely face selling pressure at the 20-day EMA and the downtrend line.
On the other hand, if the price turns upwards and breaks above the downtrend line, it will indicate the dominance of the bulls. In this case, the pair may retest the overhead resistance at $44,700, and if successfully surpassed, the prospects of a rally to $48,000 will improve.
The moving averages on the 4-hour chart have turned downwards, and the relative strength index (RSI) is trading in negative territory, suggesting a slight edge for the bears in the near term. To accelerate selling and drive the pair down to $37,980, the bears will need to break the $40,000 support.
Conversely, a break above the downtrend line would indicate that the bulls have absorbed the selling pressure. The pair may then rise to $43,500 and subsequently rally to $44,700. This level may witness a tough battle between the bulls and the bears.
Cosmos Price Analysis
Cosmos (ATOM) has been in an uptrend for several days, with the bulls showing strong demand at lower levels. They purchased the dip to the 20-day EMA ($10.52) on December 16, indicating solid support.
The bulls are currently attempting to push the price above the immediate resistance of $12.50, but the bears are putting up a fight. However, the upward sloping moving averages and the positive RSI suggest that the path of least resistance is to the upside.
If buyers successfully drive the price above $12.50, the ATOM/USDT pair may rally to $13 and later to $15. To prevent this upward movement, the bears will need to drag the pair back below the 20-day EMA, potentially causing a drop to the 50-day SMA ($9.40).
On the 4-hour chart, the bears are offering strong resistance at $12, but the bulls have managed to hold the price above the 50-SMA. The rising moving averages and the RSI near the midpoint give a slight advantage to the bulls.
A break above $12 would complete an inverse head-and-shoulders pattern, with a target objective of $13.31. Conversely, if the price turns downwards and breaks below the 50-SMA, it would clear the path for a drop to $9.50.
Filecoin Price Analysis
Filecoin (FIL) previously turned down from $5.67 on November 13 but has now reached that level again, indicating strong buying at lower levels.
The FIL/USDT pair is currently attempting to form a cup and handle formation, which would complete on a break and close above $5.67. If this occurs, it would signal the start of a new upward move, with a target objective of $8.41 for the pattern.
However, the bears are unlikely to give up easily and will likely pose a significant challenge at $6.50 and $7.40. This bullish view would be invalidated if the price turns downwards and falls below the 50-day SMA ($4.61) in the near term.
On the 4-hour chart, the bulls propelled the price above the overhead resistance of $5.67, but were unable to sustain the higher levels. Sellers are now attempting to keep the price below $5.67. If they succeed, the pair may drop to the 20-EMA, which is an important support level to watch.
If the price rebounds strongly from the 20-EMA, it would improve the likelihood of a retest of the overhead resistance at $6.20. A break above this resistance would signal the start of the next leg of the uptrend. Conversely, a break below the 20-EMA may open the doors for a fall to $4.40.
MultiversX Price Analysis
MultiversX (EGLD) previously turned down from the overhead resistance of $70 on December 12 and reached the 20-day EMA ($55) on December 16.
The rebound off the 20-day EMA indicates that sentiment remains bullish, with traders buying on dips. The bulls will attempt to push the price to $70, which is a crucial resistance level to watch in the near term. If buyers overcome this obstacle, the EGLD/USDT pair could gain momentum and rally to $90 and then to $100.
However, sellers are likely to sell rallies and try to push the price back below the 20-day EMA. If they succeed, it would signal the start of a deeper correction to the 50-day SMA ($46).
On the 4-hour chart, the pair has found support near $57 twice recently, making it a crucial level to watch in the near term. A break and close below this level could lead to a fall to $48.
Conversely, if the price turns up from the current level or the strong support at $57 and rises above $64, it would suggest an advantage for the bulls. This increases the likelihood of a rally to $70, which would likely witness a tough battle between the bulls and the bears.
Algorand Price Analysis
Buyers are encountering difficulty pushing Algorand (ALGO) above the overhead resistance of $0.22, but they have not given up much ground. This indicates that the bulls anticipate another upward move.
Both moving averages are sloping up, and the RSI is in positive territory, indicating that the bulls remain in control. Buyers are expected to step in and purchase the dip to the 20-day EMA ($0.18). If the price rebounds strongly from this level, the bulls will once again attempt to overcome the barrier at $0.22.
If they succeed, the ALGO/USDT pair could surge to $0.24 and then to $0.28. However, if the pair slides and closes below the 20-day EMA, it would signal the start of a deeper correction to the 50-day SMA ($0.14).
On the 4-hour chart, the pair has been trading in a range between $0.18 and $0.22 for some time. The 20-EMA has started to turn downwards, and the RSI has slipped into the negative zone, increasing the likelihood of a fall to $0.18.
Buyers are expected to strongly defend the $0.18 level, as a break below it would complete a triple-top pattern with a target objective of $0.14.
If the price rebounds forcefully from $0.18, it would indicate aggressive buying on dips. The pair could then rise to the 20-EMA and subsequently to $0.22. A break and close above $0.22 would suggest the start of the next leg of the upward move.
Please note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research before making any decisions.