Bitcoin and altcoins are extending their rally and traders are hopeful that the gains will push higher after this week’s consumer price index data is released.
Crypto and stock markets are usually forward-looking. Meaning, traders tend to ignore the near-term negatives and focus on the positives down the line. With Bitcoin’s (BTC) next halving in 2024, analysts are shifting their attention to this event.
Independent market analyst Rekt Capital highlighted this unique market dynamic in 2015 and 2019, a year before halving, Bitcoin rallied 234% and 316% respectively. If history repeats itself, Bitcoin’s price action may spring a surprise in 2023.
However, the near term remains uncertain and the Consumer Price Index (CPI) data on Jan. 12 may lead to a sharp uptick in volatility.
Some analysts are skeptical of the growing dominance of altcoin trading volume, which is above 50%. According to CryptoQuant contributor Maartunn, the altcoin dominance warns of “a potential risk for further downside.”
Daily cryptocurrency market performance. Source: Coin360
One event that is being closely tracked is the crisis brewing at the Digital Currency Group (DCG). Galaxy Digital Holdings CEO Mike Novogratz, in an interview with CNBC on Jan. 10, said that the DCG, Genesis and Gemini overhang could “play out in the next quarter” Though it is “not going to be great,” Novogratz does not believe it will trigger “a lot of selling.”
Could Bitcoin and altcoins continue their recovery or will higher levels attract strong selling? Let’s study the charts of the top-10 cryptocurrencies to find out.
The bears tried to stall the recovery near $17,400 on Jan. 9 but they could not sink the price below $17,061. This suggests that bulls are buying on minor dips. The price bounced on Jan. 10 and the buyers are trying to extend the relief rally.
BTC/USDT daily chart. Source: TradingView
The 20-day exponential moving average ($16,982) has turned up and the relative strength index (RSI) is above 66, indicating that bulls are in control. The BTC/USDT pair could climb to $17,850 and if this level is scaled, the next stop may be $18,388.
On the contrary, if the price turns down from the current level and breaks below the moving averages, it will suggest that the pair may continue to oscillate between $16,256 and $18,388 for a few more days.
Ether (ETH) has been trading near the overhead resistance of $1,352 for the past two days. The 20-day EMA ($1,261) has started to turn up and the RSI is near the overbought territory, indicating the path of least resistance is to the upside.
ETH/USDT daily chart. Source: TradingView
If buyers catapult the price above $1,352 and the downtrend line, it will suggest a potential trend change. The ETH/USDT pair could then rally to $1,700 and if this level is scaled, the next stop could be $1,800. The bears are likely to defend this zone with vigor.
Contrarily, if the price turns down from the overhead resistance, the pair could again drop to the moving averages. If this support cracks, it will suggest that the pair may continue its range-bound action between $1,352 and $1,150 for a while longer.
BNB (BNB) turned down from $283 on Jan. 9 but the bears could not yank the price below the 50-day SMA ($269). This suggests that the bulls are buying on dips.
BNB/USDT daily chart. Source: TradingView
The bulls will again try to kick the price above the overhead resistance at $283. If they manage to do that, the BNB/USDT pair could climb to $300 and then to $318. The rising 20-day EMA ($261) and the RSI in the positive zone, indicate that the bulls have the edge.
This positive view could invalidate in the near term if the price turns down and plunges below the moving averages. The pair could then decline to the $250 to $236 support zone. The bulls are expected to fiercely defend this level because the failure to do so may result in a decline to $220.
After trading inside the symmetrical triangle for the past several days, XRP (XRP) has made a strong move higher on Jan. 11. The bulls have pushed the price above the triangle and the 50-day SMA ($0.37).
XRP/USDT daily chart. Source: TradingView
If bulls sustain the price above the triangle, the possibility of a rally to $0.42 increases. This level may act as a major obstacle but if buyers overcome it, the XRP/USDT pair could soar to $0.51. The RSI has jumped into the positive territory, indicating that the momentum favors the buyers.
If bears want to stop the up-move, they will have to quickly pull the price back into the triangle. The pair could then decline to the 20-day EMA ($0.35) and subsequently to the support line.
Cardano (ADA) broke and closed above the downtrend line of the falling wedge pattern on Jan. 9 and 10 but the bulls could not build upon the advantage. This suggests hesitation to buy at higher levels.
ADA/USDT daily chart. Source: TradingView
The bears are trying to yank the price back into the wedge on Jan. 11. If they succeed, the ADA/USDT pair could slide to the moving averages.
A strong rebound off it suggests aggressive buying at lower levels. The bulls will then again try to drive the pair above $0.35. If this hurdle is crossed, the pair could attempt an up-move to $0.44.
Alternatively, if the price turns down and slumps below the moving averages, it will suggest that the breakout above the wedge may have been a bull trap. The pair could then fall to $0.26 and later to $0.24.
Buyers tried to thrust Dogecoin (DOGE) above the overhead resistance at $0.08 on Jan. 9 but the long wick on the candlestick shows that bears are fiercely guarding the level.
DOGE/USDT daily chart. Source: TradingView
The flattish 20-day EMA ($0.07) and the RSI near the midpoint indicate a range-bound action in the near term. The DOGE/USDT pair could then trade between $0.08 and $0.07 for some time.
Another possibility is that the price turns up from the current level and rises above the 50-day SMA ($0.08). If that happens, it will suggest that the correction may be over. The pair could then soar to $0.11.
Polygon (MATIC) has been trading above the 50-day SMA ($0.84) since Jan. 9, which is a positive sign. This suggests that the bulls are trying to flip the moving averages into support.
MATIC/USDT daily chart. Source: TradingView
The gradually upsloping 20-day EMA ($0.81) and the RSI in the positive territory indicate advantage to buyers. If bulls propel the price above $0.88, the MATIC/USDT pair could rally to the overhead resistance at $0.97. This level may act as a major obstacle but if bulls overcome it, the rally could touch $1.05.
On the downside, if bears sink the price below the 50-day SMA, the pair could fall to the 20-day EMA. If this support gives way, the pair could extend the decline to $0.75.
Litecoin (LTC) is facing resistance near the overhead resistance at $85 but the bulls have not given up much ground. This suggests that the buyers are not booking profits as they anticipate a move higher.
LTC/USDT daily chart. Source: TradingView
Both moving averages are sloping up and the RSI is in the overbought territory, indicating that bulls are in command. If buyers thrust the price above $85, the LTC/USDT pair could pick up momentum and rally toward the psychologically important level of $100.
Contrarily, if the price turns down from the current level or fails to sustain above $85, it will suggest that bears are active at higher levels. The pair could then drop to the moving averages.
A bounce off this support will suggest that the bulls are buying the dips. That could result in a retest of $85 but if the price slides below the moving averages, the pair could tumble to $61.
Polkadot (DOT) rose above the 50-day SMA ($4.92) on Jan. 9 but the higher levels attracted sellers as seen from the long wick on the day’s candlestick.
DOT/USDT daily chart. Source: TradingView
Although the price dipped back below the 50-day SMA, the bears have not been able to drag the DOT/USDT pair to the 20-day EMA ($4.70). This suggests that the bulls are not rushing to the exit and will again try to drive the pair above $5.10.. If they can pull it off, the pair could soar to the downtrend line.
This positive view could invalidate in the near term if the price turns down and breaks below the 20-day EMA. The pair could then fall toward the crucial support at $4.22.
After trading between the moving averages for a few days, Uniswap (UNI) broke and closed above the 50-day SMA ($5.58) on Jan. 8. This indicates that the uncertainty resolved in favor of the bulls.
UNI/USDT daily chart. Source: TradingView
The UNI/USDT pair could rally to the resistance line of the symmetrical triangle. The bears may again try to halt the recovery at this level. If the price turns down from this resistance but rebounds off the moving averages, it will suggest that traders are buying on dips. That could increase the likelihood of a break above the triangle. The pair could then start an up-move toward $7.8.
Conversely, if the price turns down from the current level or the resistance line and breaks below the moving averages, it will suggest that the pair may extend its stay inside the triangle for some more time.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.