The most talked-about event last week was the West Texas Intermediate crude futures for May delivery, which plunged to negative $37.63 per barrel on April 20. That was followed by a sharp rebound, which helped crude oil recover to $17.31 by the end of the week. Crude oil’s volatility surpassed that of Bitcoin (BTC) in mid-March and has only climbed higher since then. Several energy traders are likely to have suffered huge losses due to the roller coaster ride in oil.
Crypto market data daily view. Source: Coin360
While Bitcoin is likely to hog the limelight this week, a few altcoins have also formed bullish patterns. This suggests that if Bitcoin prices remain strong, these altcoins could also move higher. So, let’s look at the top five bullish setups that could offer short-term trading opportunities this week.
XLM/USD
Stellar Lumens (XLM) rallied and closed (UTC time) above the overhead resistance of $0.053194 on April 22, which completed a bullish ascending triangle pattern. This setup has a target objective of $0.076388.
XLM-USD daily chart. Source: Tradingview
Usually, when the price breaks out of a bullish setup, it tends to return and retest the breakout level. However, in some cases, the momentum is so strong that the price only consolidates for a few days and then resumes its up move.
Both moving averages are sloping up and the relative strength index is trading in the overbought zone, which suggests that bulls have the upper hand.
The XLM/USD pair has also been consolidating above the immediate psychological support of $0.060 for the past two days. This indicates that the bulls are not closing their positions in a hurry as they expect higher levels in the next few days.
XLM-USD 4-hour chart. Source: Tradingview
The sharp rise from close to $0.050 to $0.066102 shows a flagpole formation. Following the sharp up move, the XLM/USD pair has made a pennant, which usually acts as a continuation pattern.
A strong breakout of the pennant signals the possible resumption of the up move. The bulls broke above the pennant but are struggling to hold on to the breakout. This suggests selling at higher levels.
Therefore, the traders can wait for the price to close (UTC time) above $0.063327 before buying. The initial stop loss can be kept at $0.060. As the price moves northwards, the stops can be trailed higher to reduce the risk and protect the paper profits.
The bears might aggressively defend the overhead resistance at $0.066102 but if this level is crossed, the move can extend to $0.073 and then to $0.078.
ADA/USD
Cardano (ADA) broke above the double top that was forming at $0.0369205 on April 23. This attracted buyers and the altcoin rallied to the next overhead resistance at $0.0437998 on April 24.
ADA-USD daily chart. Source: Tradingview
After a day of consolidation on April 25, when the ADA/USD pair formed an inside day candlestick pattern, the bulls have broken above the resistance of $0.0437998. However, the bears are unlikely to give up without a fight as they are mounting stiff resistance at higher levels.
With both moving averages sloping up and the RSI in the overbought zone, the advantage is with the bulls. If the bulls can sustain the price above $0.0437998, it could result in a rally to $0.052 and then to $0.061 in the next few days.
ADA-USD 4-hour chart. Source: Tradingview
The 4-hour chart shows a flagpole that formed after the pair broke above $0.0369205. That was followed by a pennant formation as the bears defended the overhead resistance at $0.0437998.
However, today, the bulls have broken above the pennant and have pushed the price above the overhead resistance at $0.0437998. Therefore, the bulls can buy at the current levels with an initial stop loss at $0.0412, which can be trailed higher as the pair moves up.
The first target to watch on the upside is $0.0504 where partial profits can be booked. This bullish view will be invalidated if the bears sink the price below $0.04192.
BTC/USD
Bitcoin (BTC) has been leading the recovery from the front. With the halving approaching, the leading cryptocurrency is likely to remain in focus next week. On April 23, the bulls broke above the critical resistance of $7,454.17.
BTC-USD daily chart. Source: Tradingview
However, the BTC/USD pair has not been able to pick up momentum as the bears are aggressively selling on any rise. But the positive thing is that the bulls have been maintaining the price above the breakout level of $7,454.17, which indicates strength.
Both moving averages are sloping up and the RSI has broken above the 60 mark for the first time since mid-Feb., which shows that bulls have the upper hand. The next level to watch on the upside is the $8,000-$8,146.84 resistance zone.
BTC-USD 4-hour chart. Source: Tradingview
Bitcoin had been trading in a tight range of about $7,605-$7,435 for the past few days. Attempts to break above or below the price range did not sustain. Even today, the bulls broke above the range but the price has again slipped back into it. This shows aggressive selling by the bears at higher levels.
Along with the range, a pennant formation can also be seen on the charts. The bulls purchased the dip below the pennant today, which suggests strong buying at lower levels. If the bulls can push the price above the pennant, the up move is likely to resume. The target objective of this breakout is $8,393.25.
Therefore, the bulls can buy on a breakout and close (UTC time) above the pennant. The initial stop loss can be kept at $7,380, which can be trailed higher after the pair moves above $7,740.37. If the bulls struggle to break above $8,000, the stops can be tightened further. This bullish view will be invalidated if the pair turns around and breaks below $7,435.47.
BCH/USD
Bitcoin Cash (BCH) has largely been range-bound between $200 and $250 for more than a month. The lone attempt to push the price above the range on April 6 turned around from $280.47 on April 08.
BCH-USD daily chart. Source: Tradingview
When the price consolidates for a long time, it usually culminates with a strong breakout. In this case, if the bulls can propel the price above $250, the BCH/USD pair is likely to pick up momentum and rally to $300.
On the other hand, if the pair again turns down from $250, the range-bound action could extend for a few more days. The trend will turn negative on a break below $200 as it will complete a bearish head and shoulders pattern, which could result in a retest of the recent lows at $141.11.
BCH-USD 4-hour chart. Source: Tradingview
Though the pair is stuck in a trend, the traders can spot an ascending triangle pattern. This bullish setup will complete on a breakout and close (UTC time) above $250. Therefore, the traders can buy on a close above $250 and keep a stop loss at $225.
The bulls might face a stiff resistance at $280.47, hence, the traders can tighten the stops closer to this level. However, if this level is crossed, the up move can reach $300 and then $320.
If the price turns down from the current levels, the traders might get another buying opportunity near the trendline of the ascending channel. However, if the bears sink the price below the trendline, long positions can be avoided.
HT/USD
Huobi Token (HT) has recovered sharply from its recent lows of $1.18361, which shows strong demand at lower levels. For the past few days, $4.05 has been acting as a stiff overhead resistance.
HT-USD daily chart. Source: Tradingview
However, both moving averages have been gradually moving higher and the RSI is in the positive territory, which suggests that bulls have the upper hand.
The HT/USD pair has also formed a bullish ascending triangle pattern, which will complete on a breakout and close (UTC time) above $4.05. The pattern target of this setup is $4.58. If this level is crossed, the up move can extend to $4.80.
Conversely, the failure to sustain the price above $4.05 will keep the pair inside the triangle for a few more days.
HT-USD 4-hour chart. Source: Tradingview
The bulls broke above the overhead resistance of $4.05 today but they have not been able to sustain the breakout. This suggests selling at higher levels. However, the positive sign is that the bulls have not allowed the price to sink below the support at $3.90.
This suggests demand at lower levels. The bulls are again likely to attempt a breakout above $4.05. If the pair can close (UTC time) above $4.05, the ascending triangle pattern will complete and a rally to $4.58 is possible.
Therefore, traders can buy on a close (UTC time) above $4.05 and keep a stop loss of $3.80. The bears might attempt to stall the rally in the $4.15-$4.20 resistance zone. If the traders find that the bulls are struggling to push the price above this zone, the stops can be tightened to reduce the risk.
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.
The market data is provided by the HitBTC exchange.