Prime 5 cryptocurrencies to see this week: BTC, LTC, BCH, XMR, THETA
The supply and demand equation determines the price of an asset. In the past few months, the surge in institutional demand for Bitcoin (BTC) has resulted in a strong upward trend. This upward trend can continue until demand exceeds supply.
On-chain data shows two withdrawals of more than 12,000 bitcoin each from Coinbase Pro this week, 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 over the long term.
In an interview with Cointelegraph, Mexico's second richest man, Ricardo Salinas Pliego, said that Bitcoin was his "best investment ever". Salinas has about 10% of his liquid portfolio in Bitcoin and he's in no rush to sell as he wants to "sit around another five or ten years".
Day view of crypto market data. Source: Coin360
Strong demand and HODLing from institutional investors have pushed Bitcoin's market cap to over $ 500 billion for the first time. It has also increased Bitcoin's dominance to over 70.5%, suggesting that most of the money inflow has been in Bitcoin.
At some point, however, there will be no more fresh money flowing into Bitcoin, which can lead to a correction or consolidation. Traders can then turn their attention to selected altcoins that could gain momentum.
Let's look at the charts of the top five cryptocurrencies that could bounce back over the next few days.
BTC / USD
Bitcoin price passed the overhead resistance of $ 24,302.50 on December 25, continuing the upward trend. This breakout has a target of $ 28,664.04 and the price hit an intraday high of $ 28,419.94 today.
BTC / USDT daily chart. Source: TradingView
The relentless surge in the BTC / USD pair has drawn traders who were on the verge of waiting for a dip. Institutional investors, momentum traders, and speculators have 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 indicates a profit posting at higher levels. Even if the uptrend continues, the pair could face another sell near the $ 30,000 mark.
If the uptrend falters, short-term traders could rush to exit and this could pull price back to the 20-day exponential moving average ($ 22,613). If this support holds, the pair may try again to continue the uptrend.
On the other hand, a break below the 20-day EMA could push the price to the critical support of $ 20,000. Hence, traders can avoid chasing higher prices.
BTC / USDT 4-hour chart. Source: TradingView
The 4 Hour Chart shows the formation of a Doji candle pattern, indicating indecision between bulls and bears. Although the downside uncertainty has resolved, the long tail on the candlestick indicates a buy at lower levels. This suggests that traders will buy into every little break-in.
However, if the bulls do not push the price above $ 28,419.94, the selling may resume which could bring the price down to $ 25,446 at the 20-EMA. The overbought values of the relative strength index also suggest a possible correction.
A break below the 20 EMA and support at $ 24,302.50 suggest that the momentum has weakened.
LTC / USD
In a strong uptrend, traders usually buy the dips for the 20-day EMA (USD 105) and that is exactly what happened on December 23rd. Litecoin (LTC) rebounded strongly on December 24th and momentum picked up after the bulls pushed the price above the overhead resistance zone of $ 118.64 to $ 124.12.
LTC / USDT daily chart. Source: TradingView
The immediate target is $ 145, but if the bulls don't allow the price to fall and stay below $ 124.1278, the rally may extend to $ 180. The rising moving averages and RSI in the overbought zone suggest that 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 breaks below the 20-day EMA. Such a move will suggest that traders are not buying the dips.
LTC / USDT 4 hour chart. Source: TradingView
The 4 hour chart is also in an uptrend as both the moving averages are rising and the RSI is in positive territory. However, momentum has weakened as the bulls encounter resistance near $ 136.
If the bulls don't allow the price to stay below the 20 EMA level, the pair could hit the target of $ 145. However, if the price deviates from current levels and falls below $ 118.6497 and the 50 simple moving average, it signals the beginning of a deeper correction.
BCH / USD
Bitcoin Cash (BCH) has repeatedly tried to break the $ 353 overhead resistance over the past few days. Although the bulls pushed the price above USD 353 twice, which was marked by an ellipse on the chart, they were unable to sustain the higher levels.
BCH / USD daily chart. Source: TradingView
This suggests that if it spikes above $ 353, traders are selling aggressively. On the positive side, however, the bulls have accumulated on declines below $ 280 and are currently trying to push the price above $ 353.
If successful, the BCH / USD pair could begin its journey towards USD 500. It may not be a straight jump to the target as the bears will try again to stop the rally at $ 409 and $ 430. However, if both levels are scaled, the pair could gain momentum.
The rising moving averages and the RSI above 61 suggest that bulls have the upper hand.
BCH / USD 4 hour chart. Source: TradingView
The 4-hour chart shows the pair is currently trading in a large area 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 that has a target of $ 485. The moving averages have made a bullish transition and the RSI is in positive territory, suggesting that the bulls have the upper hand.
However, if the price deviates again from current levels or USD 370, the couple can extend their stay within the range for a few more days.
XMR / USD
The long wick on December 23rd shows that traders posted gains after Monero (XMR) hit $ 167, the target of the reverse head-and-shoulders breakout.
XMR / USDT daily chart. Source: TradingView
On the positive side, however, the bulls bought the drop to the 20-day EMA ($ 151) on December 24th. The rising moving averages and the RSI in the positive zone suggest that sentiment remains positive.
The long tail on today's candle holder shows that cops buy dips on. If they can push and hold the price above $ 170, the XMR / USD pair could rebound to the next target at $ 197, just below the psychological resistance of $ 200.
This positive view will be invalidated if the price deviates from current levels and falls below the 20-day EMA. Such a move could signal a lower correction to $ 135.50.
XMR / USDT 4 hour chart. Source: TradingView
The 4 hour chart shows that the pair has traded within an ascending channel but the bulls have failed to push the price into the upper half of the channel and maintain it. The pair has usually turned away from the center of the canal.
This suggests that short-term traders are taking profits at times. However, if the bulls can push and hold the price above the midpoint of the channel, the pair could rally to the channel's resistance line, indicating some momentum is picking up.
On the other hand, a break below the channel's support line could signal a possible change in the short-term trend.
THETA / USD
THETA has rallied vertically in the past few days, pushing the RSI deep into overbought territory. This triggered a correction, as evidenced by the sharp decline today.
THETA / USDT daily chart. Source: TradingView
However, if the price does not dip below the 38.2% Fibonacci retracement level at $ 1.31994 and persist, it suggests that traders will continue to buy on dips as they expect the rally to extend further .
If the bulls can push the price above $ 1.742, the THETA / USD pair could rise to the psychological level of $ 2 and then to $ 2.40.
Contrary to this bullish assumption, this suggests that momentum has subsided as the bears cut the price below the 50% Fibonacci retracement level at $ 1.18957.
THETA / USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that the bulls are currently trying to defend the 20-EMA. If the pair bounces off this level, the bulls will try to resume the uptrend. The rising moving averages and the RSI in positive territory suggest that the bulls are in control.
If, contrary to this assumption, the pair breaks below the 20 EMA, it suggests that near-term momentum has weakened. That could bring the price down to the closest support at the 50-SMA.
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