On-chain data suggests that high-net-worth individuals continued to buy Bitcoin (BTC) after Christmas. Analysts at Santiment said that smaller traders sold about $647 million worth of Bitcoin and this sum may have been bought up by Bitcoin whales.
Data also signals that large investors have been buying and holding their purchases throughout 2020, without booking profits in an aggressive manner. According to Glassnode analysts, this has caused the number of Bitcoin in circulation to decline by about 1 million.
That means, out of the total available supply, 14.5 million Bitcoin are considered illiquid. Glassnode analysts say that this leaves only 4.2 million Bitcoin in constant circulation that are available for trading..
This could further increase the imbalance in the demand and supply equation boosting Bitcoin’s price higher.
However, every bull market goes through periodic corrections and Bitcoin may also be due for one. Therefore, traders should weigh the risks before buying at the current levels.
Let’s analyze the charts of the top-10 cryptocurrencies to find the altcoins that may join Bitcoin in the breakout.
BTC/USD
Bitcoin had formed a gravestone Doji candlestick pattern on Dec. 27 but the bears could not pull the price down on Dec. 28. The bears again tried to start a correction on Dec. 29 but the hammer candlestick formation suggests strong buying on dips.
The bulls have pushed the BTC/USD pair to a new all-time high at $28,587.67 today. This suggests that the uptrend has resumed. The next level to watch on the upside is the psychological barrier at $30,000.
Although the rising moving averages suggest an advantage to the bulls, the relative strength index (RSI) has risen deep into overbought territory, which suggests that a correction could be around the corner.
Overbought levels at the start of a rally is a sign of accumulation, but after a mature rally, an RSI above 80 suggests buying due to FOMO and this usually leads to a correction. Therefore, traders should remain cautious and protect their paper profits with a suitable stop-loss.
A break below $25,800 could signal the start of a deeper correction to the 20-day exponential moving average ($23,836) and then to the 50-day simple moving average ($20,077).
ETH/USD
Ether (ETH) formed an inside day long-legged Doji candlestick pattern on Dec. 29. This suggests that the bears tried to pull the price down but the bulls absorbed all the selling and staged a strong recovery by the end of the day.
The bulls are currently attempting to push the price above $750 but the Doji candlestick pattern suggests indecision among the bulls and the bears.
If this uncertainty resolves to the upside and the ETH/USD pair rises above $750, the uptrend could reach $800 where the bears may again mount a stiff resistance.
The upsloping moving averages and the RSI near the overbought territory suggest that bulls are in control.
However, if the bulls fail to drive the price above $750, the pair could attract profit booking by the short-term traders. If the bears sink the price below $$680, the pair could drop to the 20-day EMA ($645).
A strong rebound off the 20-day EMA will suggest that the sentiment remains bullish and traders are buying on dips. On the other hand, a break below the 20-day EMA may signal the start of a deeper correction.
XRP/USD
XRP continues to be in a strong downtrend and every attempt to start a relief rally is facing aggressive selling by the bears. The altcoin dipped to $0.172536 on Dec. 29 but the long tail on the candlestick suggests that bulls are attempting to defend this level.
The relief rally could face stiff resistance at the 38.2% Fibonacci retracement level at $0.358202. If the price turns down from this level, the bears will again try to resume the downtrend. A break below $0.172536 could result in a fall to $0.10.
However, if the bulls defend the $0.169 support, the XRP/USD pair could consolidate in a tight range for a few days before starting the next trending move.
LTC/USD
The bulls have managed to keep Litecoin (LTC) above the $124.1278 support for the past few days but the failure to resume the uptrend suggests a lack of demand at higher levels.
When the price fails to rise, it could attract selling by short-term traders and that may pull the price down to the 20-day EMA ($110).
If the LTC/USD pair rebounds off this support, the bulls will again try to resume the uptrend. If they succeed in driving the price above $140, the pair could rally to $160.
However, the RSI has formed a negative divergence, which suggests that the momentum is weakening. A break below the 20-day EMA could drag the price down to $95.40.
BCH/USD
Bitcoin Cash (BCH) is struggling to rise above the $370 overhead resistance but the positive thing is that the price has not given up much ground. This suggests that traders are not closing their positions in a hurry.
The upsloping moving averages and the RSI above 60 suggest that the path of least resistance is to the upside. If the bulls can push and sustain the price above $370, the BCH/USD pair may rise to $430 and then to $500.
This positive view will be negated if the pair drops below the 20-day EMA ($317). Such a move could keep the pair range-bound for a few more days.
DOT/USD
Polkadot (DOT) soared above the $5.60 to $6.0857 overhead resistance zone on Dec. 28 and followed it up with another sharp up-move on Dec. 29 that carried the altcoin to $7.70, just above the $7.67 target objective mentioned in the previous analysis.
The bears are currently attempting to defend the $7.70 level but the long tail on today’s candlestick suggests aggressive buying by the bulls on intraday dips.
If the price does not drop below the 38.2% Fibonacci retracement of $6.6428, the DOT/USD pair could resume the uptrend, with the next target at $10.
On the contrary, if the bears pull the price below $6.6428, a drop to $6.3163 and then to $5.9897 is possible. Such a move will suggest that the momentum has weakened and that could keep the pair range-bound for a few days.
ADA/USD
Cardano (ADA) broke above the $0.175 to $0.1826315 overhead resistance zone on Dec. 29 but the bulls have not been able to sustain the breakout. The price has dipped back below $0.1826315 today.
However, the upsloping moving averages and the RSI in the positive zone suggest that bulls are in control.
If the ADA/USD pair rebounds off the current levels, it will suggest that $0.175 has flipped to support. The bulls will then try to push the price above $0.1966315, which could result in a rally to $0.22 and then to $0.235.
This positive view will invalidate if the price dips and sustains below $0.175. Such a move could result in a drop to the 20-day EMA ($0.161).
BNB/USD
Binance Coin (BNB) closed above the $35.69 overhead resistance on Dec. 28 and followed it up with another sharp up-move on Dec. 29 that pushed the price to a new all-time high at $39.99.
The rising moving averages and the RSI in the positive zone suggest that bulls have the upper hand.
The bears are currently attempting to stall the up-move near $40 but if the price does not dip below $35.69, it will increase the possibility of the resumption of the uptrend. If that happens, the BNB/USD pair could rise to $50.
Contrary to this assumption, if the price dips back below $35.69, a drop to the 20-day EMA ($33) is likely.
LINK/USD
The bulls could not propel Chainlink (LINK) above the $13.28 overhead resistance on Dec. 27 and the altcoin turned down on Dec. 29. The bears are currently attempting to sink the price below the $11.29 support.
If they succeed, the LINK/USD pair could drop to $10 and if this support also gives way, the decline may extend to $8. The downsloping 20-day EMA ($12.24) and the failure of the RSI to sustain above 50 suggests that bears have the upper hand.
This negative view will be invalidated if the pair rebounds off the current levels and rises above the $13.28 resistance. If that happens, it will suggest accumulation at lower levels. The pair could then rally to $16.39.
BSV/USD
Bitcoin SV (BSV) has been range-bound between $146 and $181 for the past few weeks. The flat moving averages and the RSI just below the midpoint suggest a balance between supply and demand.
In a well-defined range, traders buy the dips to the support and sell near the resistance. Thus, the BSV/USD pair may rebound off $146 and extend its stay inside the range for a few more days.
The longer the consolidation, the stronger will be the breakout from it. If the pair rises above the moving averages, the bulls will once again try to push the price above $181. If they succeed, a rally to $216 and then to $227 is possible.
Contrary to this assumption, if the bears sink the price below $146, the trend will shift in favor of the bears.
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.