The supply and demand equation determines the price of an asset. Over the past few months, the rise in institutional demand for Bitcoin (BTC) has driven a sharp rise. This uptrend can continue until demand exceeds supply.
On-chain data shows two withdrawals of over 12,000 Bitcoin each from Coinbase Pro this week, which is just below the 28,000 Bitcoin mined in November. This suggests that demand from institutional investors remains intact even after Bitcoin’s recent rally, as they are bullish for the long term.
Meanwhile, Mexico’s second richest man, Ricardo Salinas Pliego, said in an interview with Cointelegraph that Bitcoin was his “best investment ever.” Salinas has around 10% of his liquid portfolio in Bitcoin and he is in no rush to sell because he wants to “stay another five or ten years”.
Strong demand and HODLing from institutional investors propelled Bitcoin’s market cap to over $ 500 billion for the first time. It also propelled Bitcoin’s market dominance above 70.5%, suggesting that the influx of money has largely been in Bitcoin.
However, at some point fresh money will stop flowing into Bitcoin and this could lead to a correction or consolidation. Traders can then shift their attention to selecting altcoins, which could gain momentum.
Let’s take a look at the charts of the top five cryptocurrencies that could rally in the coming days.
BTC / USD
Bitcoin’s price broke overhead resistance of $ 24,302.50 on December 25 and resumed the uptrend. This breakout has a target of $ 28,664.04 and the price hit an intraday high at $ 28,419.94 today.
The relentless rise in the BTC / USD pair attracted traders who waited on the sidelines for a drop to enter. Institutional investors, momentum traders and speculators also joined the party that kept the uptrend intact.
However, the current rate of increase is not sustainable. The long wick of today’s candlestick suggests a reservation of profits at higher levels. Even if the uptrend continues, the pair may again face sales close to the $ 30,000 mark.
If the uptrend stalls, short-term traders could rush to the exit which could bring the price back to the 20-day exponential moving average ($ 22,613). If this support holds, the pair could try to resume the uptrend again.
On the other hand, a breakout below the 20 day EMA could drag the price towards critical support at $ 20,000. Hence, traders can avoid chasing prices higher.
The 4 hour chart shows the formation of a Doji candlestick pattern, which suggests indecision among the bulls and bears. While the uncertainty is resolved to the downside, the long tail of the candlestick shows buying at lower levels. This suggests that traders buy at every minor drop.
However, if the bulls fail to propel the price above $ 28,419.94, the selling could continue and this could push the price down at 20-EMA to $ 25,446. Overbought levels of the Relative Strength Index also indicate a possible correction.
A break below 20-EMA and support at $ 24,302.50 will suggest that momentum has weakened.
LTC / USD
In a strong uptrend traders typically buy the 20-day EMA ($ 105) declines and that’s what happened on December 23. above the overhead resistance zone of $ 118.64 to $ 124.12.
The immediate target is $ 145, but if the bulls don’t allow the price to drop and stay below $ 124.1278, the rally could extend to $ 180. Rising moving averages and RSI in the overbought zone suggest the bulls are in control.
This bullish view will be invalidated if the LTC / USD pair turns away from current levels or overhead resistance and falls below the 20-day EMA. Such a move will suggest that traders are not buying the dips.
The 4-hour chart is also in an uptrend with both moving averages sloping upward and the RSI in positive territory. However, momentum has weakened as the bulls face resistance near $ 136.
If the bulls don’t allow the price to hold below 20-EMA, the pair could be on track to hit $ 145. But if the price drops from current levels and goes below $ 118.6497 and the 50 simple moving average, it will suggest the start of a deeper correction.
BCH / USD
Bitcoin Cash (BCH) has made several attempts to break over the overhead resistance of $ 353 over the past few days. Although the bulls pushed the price above $ 353 twice, marked by an ellipse on the chart, they were unable to maintain the higher levels.
This suggests that traders are aggressively selling at anything higher than $ 353. However, the silver lining is that the bulls have accumulated on declines below $ 280 and are currently trying to push the price above $ 353.
If they are successful, the BCH / USD pair could start its journey towards $ 500. This may not be a direct dash towards the target goal, as the bears will try again to block the rally at $ 409 and $ 430. But if these two levels are scaled up, the pair could gain momentum.
The rising moving averages and the RSI above 61 suggest that the bulls have the upper hand.
The 4-hour chart shows that the pair is currently trading in a wide range between $ 255 and $ 370. The bulls are currently trying to push the price above the overhead resistance of $ 353 to $ 370.
If successful, the pair could start an uptrend with a target goal of $ 485. The moving averages have completed a bullish cross and the RSI is in positive territory, suggesting that the bulls have the upper hand.
However, if the price drops again from the current level or to $ 370, the pair may extend their stay in the range for a few more days.
XMR / USD
The long wick of the December 23 candlestick shows that traders recorded profit after Monero (XMR) hit $ 167, the target target for the breakout of the inverted head and shoulders pattern.
However, what’s positive is that the bulls bought the 20-day EMA low ($ 151) on December 24. The moving averages on the rise and the RSI in the positive zone suggest sentiment remains positive.
The long tail of today’s candlestick shows that the bulls buy when there is a dip. If they can push and hold the price above $ 170, the XMR / USD pair could rally to the next target target at $ 197, just below the psychological resistance at $ 200.
This positive opinion will be invalidated if the price drops from current levels and goes below the 20 day EMA. Such a move could signal a deeper correction to $ 135.50.
The 4 hour chart shows that the pair traded in an ascending channel, but the bulls failed to push and hold the price in the upper half of the channel. The pair generally fell from the middle of the channel.
This suggests that short-term traders are taking profits at intermittent levels. However, if the bulls can push and hold the price above the midpoint of the channel, the pair could rally to the resistance line of the channel, indicating a resumption of momentum.
In contrast, a break below the channel’s support line could signal a possible short-term trend change.
THETA / USD
THETA has rallied vertically in recent days, which has pushed the RSI deep into overbought territory. This has started a correction, as evidenced by today’s steep decline.
However, if the price does not fall and hold below the 38.2% Fibonacci retracement level at $ 1.31994, this will suggest that traders will continue to buy if there is a dip as they anticipate the rally. will last longer.
If the bulls can push the price above $ 1.742, the THETA / USD pair could climb back to the psychological level of $ 2 and then to $ 2.40.
Contrary to this bullish assumption, if the bears cause the price to drop below the 50% Fibonacci retracement level at $ 1.18957, it will suggest that momentum has weakened.
The 4 hour chart shows that the bulls are currently trying to defend 20-EMA. If the pair rebounds from this level, the bulls will attempt to resume the uptrend. Rising moving averages and RSI in positive territory suggest the bulls are in control.
Contrary to this assumption, if the pair breaks below 20-EMA, it will suggest that the near-term momentum has weakened. This could push the price down to the next support at 50-SMA.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move comes with risk, you should do your own research when making a decision.