The supply and demand equation determines the price of the asset. In the past few months, institutional demand for Bitcoin (BTC) has surged, leading to a strong bull market. This upward trend may continue until demand exceeds supply.
On-chain data shows that more than 12,000 bitcoins were withdrawn from Coinbase Pro twice this week, only slightly lower than the 28,000 bitcoins mined in November. This shows that even after Bitcoin’s recent rally, the needs of institutional investors have remained the same because they are long-term bullish.
At the same time, Ricardo Salinas Pliego, the second richest man in Mexico, said in an interview with Cointelegraph that Bitcoin is his “best investment ever.”
The strong demand from institutional investors and HODLing made Bitcoin’s market value exceed $500 billion for the first time. It also raised Bitcoin’s market dominance to more than 70.5%, which indicates that most of the inflow of funds has flowed into Bitcoin.
However, at some point, fresh money will stop flowing into Bitcoin, which may lead to corrections or mergers. Then, traders can turn their attention to choosing altcoins, which may accelerate development.
Let’s take a look at the charts of the top five cryptocurrencies that may rebound in the next few days.
Bitcoin price broke the upper resistance of $24,302.50 on December 25 and resumed its upward trend. The target price for this breakthrough is $28,664.04, and today the price reached an intraday high of $28,419.94.
The continuous rise of the BTC/USD currency pair has attracted traders who have been waiting on the sidelines and waiting for the decline to enter. Institutional investors, momentum traders, and speculators also joined the party that kept the upward trend unchanged.
However, the current growth rate is not sustainable. The long wick on the candlestick today indicates that the profit reservation is at a high level. Even if the upward trend continues, the currency pair may still face selling near the $30,000 mark again.
If the uptrend stalls, short-term traders may rush to exit, which may pull the price back to the 20-day exponential moving average ($22,613). If the support level is established, the currency pair may try to resume the upward trend again.
On the other hand, a break below the 20-day moving average may drag the price to the key support level of $20,000. Therefore, traders can avoid chasing higher prices.
The 4-hour chart shows the formation of a doji candlestick pattern, which shows the indecision between bulls and bears. Although the uncertainty has eliminated the adverse effects, the long tail on the candlestick shows a lower level of buying. This shows that traders are buying every time there is a small drop.
However, if the bulls fail to push the price above $28,419.94, the selling may continue, which may pull the price down to the 20-EMA to $25,446. The overbought level on the relative strength index also points to a possible correction.
A break below the 20-day moving average and support at 24,302.50 USD will indicate weakening momentum.
LTC / USD
In a strong uptrend, traders usually buy the 20-day moving average ($105) decline, which is what happened on December 23. Litecoin (LTC) rebounded sharply on December 24, and its momentum recovered after bulls pushed up prices. Above the upper resistance level of 118.64 USD to 124.12 USD.
The short-term target is US$145, but if the bulls do not allow the price to fall and stay below US$124.1278, the gains may extend to US$180. The rising moving average and the RSI in the overbought zone indicate that the bulls are in control.
If the LTC/USD pair reverses from the current level or above resistance and falls below the 20-day moving average, this bullish view will be invalidated. Such a move shows that traders do not buy on dips.
The 4-hour chart is also in an upward trend, the moving average is sloping upward, and the RSI is in the positive zone. However, the momentum weakened as the bulls faced resistance near the $136 level.
If the bulls do not allow the price to stay below the 20-EMA, the currency pair may reach the goal of $145. However, if the price falls from the current level and breaks below $118.6497 and the 50 simple moving average, it indicates that a deeper correction has begun.
BCH / USD
Bitcoin Cash (BCH) has repeatedly tried to break the overhead resistance of $353 in the past few days. Although the bulls have twice pushed the price above $353, as indicated by an oval on the chart, they were unable to maintain a high level.
This shows that traders will actively sell when the price rises above $353. However, on the positive side, the bulls have accumulated when they fell below $280 and are currently trying to push the price above $353.
If they succeed, the BCH/USD currency pair may begin its journey towards $500. This may not reach the target soon, as the bears will again try to stop the gains at $409 and $430. However, if these two levels are adjusted at the same time, the currency pair may rebound.
The rising moving average and RSI above 61 indicate that the bulls have an advantage.
The 4-hour chart shows that the current trading price of the currency pair is between $255 and $370. The bulls are currently trying to push the price to the overhead resistance of $353 to $370.
If they succeed, the currency pair will begin an ascending target with a target of $485. The moving average has completed a bullish crossover and the RSI is in the positive zone, which shows that the bulls have an advantage.
However, if the price drops again from the current level or $370, the currency pair may extend its stay in the range for a few more days.
XMR / USD
The long candlestick on December 23 showed that traders booked profits after Monero hit $167 (the goal of a breakthrough from the reverse head and shoulders pattern).
However, the positive thing is that the bulls bought the channel that fell to the 20-day moving average ($151) on December 24. The rising moving average and the RSI in the positive zone indicate that sentiment remains positive.
The long tail on the candlestick today indicates that the bulls are buying on dips. If they can push the price higher and maintain it above $170, then XMR/USD may rebound to the next target target of $197, slightly below the psychological resistance of $200.
If prices fall from current levels and break below the 20-day moving average, this positive view will be invalidated. Such a move may herald a deeper correction to $135.50.
The 4-hour chart shows that the currency pair has been trading in the ascending channel, but the bulls have failed to push the price higher and maintain it in the upper half of the channel. The currency pair is usually adjusted lower from the midpoint of the channel.
This shows that short-term traders are making profits intermittently. However, if the bulls can push the price higher and maintain it above the midpoint of the channel, the currency pair may rebound to the resistance line of the channel, indicating a rebound in momentum.
On the other hand, a break below the channel support line may indicate a possible change in the short-term trend.
In the past few days, THETA has risen vertically, which pushed the RSI into the overbought zone. Judging from the sharp decline today, this has already begun to be corrected.
However, if the price does not fall and remains below the 38.2% Fibonacci retracement level of $1.31994, it indicates that traders continue to buy on dips because they expect the rise to expand further.
If the bulls can push the price above $1.742, then THETA/USD may rebound to the psychological level of $2 and then rise to $2.40.
Contrary to this bullish assumption, if the bears drop the price below the 50% Fibonacci retracement level of $1.18957, this would indicate a weakening of momentum.
The 4-hour chart shows that the bulls are currently trying to defend the 20-EMA. If the currency pair rebounds from this level, the bulls will try to resume the uptrend. The rising moving average and the RSI in the positive zone indicate that the bulls are in control.
Contrary to this assumption, if the currency pair breaks below the 20-EMA, it indicates a weakening of short-term momentum. This may pull the price down to the next support level of the 50-SMA.
The views and opinions expressed here are only those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risk, so you should conduct your own research when making a decision.