Bitcoin’s 8-week winning streak is at risk, but ATOM, FIL, EGLD and ALGO don’t care
Bitcoin (BTC)'s eight-week winning streak may be coming to an end as the price fell to 4% this week. Recent weakness indicates profit booking by traders but does not change the short-term trend. The recoil will help reduce the build-up of bubbles.
After the initial shake-up, strong hands are likely to re-enter the crypto market as the macro environment is buoyant for risk-assets. The Federal Reserve's decision to pause rate hikes and possibly lower rates in 2024 could further boost demand for crypto products.
However, nothing goes in a straight line. After a rally, traders generally take profits and turn their attention to other coins. As Bitcoin takes a breather, traders have the opportunity to shift their focus to altcoins.
What coins are likely to attract buyers in the short term? Let's take a look at the charts of the top five cryptocurrencies that are showing promise.
Bitcoin price analysis
Bitcoin is being squeezed between the 20-day exponential moving average ($41,370) and the bearish line. This sets the stage for a sharp breakout over the next few days.
If the price dips below the 20-day EMA, the bears will recognize the opportunity and try to pull the BTC/USDT pair to a strong support at $37,980. The bulls are expected to defend this level strongly. If the price recovers from $37,980, it may face selling at the 20-day EMA and again at the lower line.
Instead, if the price changes and breaks above the lower line, it indicates that the bulls are confirming their dominance. The pair can then retest the profit margin at $44,700. If this level is weighed, the prospect of a rally to $48,000 will improve.
The moving averages on the 4-hour chart have turned down, and the relative strength index (RSI) is trading in negative territory, indicating that the bears have a slight edge in the near term. The bears need to break the $40,000 support and sink the pair to $37,980 to accelerate the selloff.
At the top, a break above the low line indicates that the bulls are holding the selloff. The pair may first rise to $43,500 and then to $44,700. This level may witness a fierce battle between the bulls and the bears.
Cosmos cost analysis
Cosmos (ATOM) is at a multi-day high. The bulls bought a dip to the 20-day EMA ($10.52) on December 16, indicating strong demand for lower levels.
The bulls are trying to push the price above the $12.50 resistance immediately, but the bears are not relenting. However, the upward moving averages and the RSI in the positive area suggest that the path of least resistance is up.
If buyers drive the price above $12.50, the ATOM/USDT pair may consolidate to $13 and later to $15. If the bears want to prevent an upward move, they need to pull the pair back below the 20-day EMA. The pair may sink towards the 50-day SMA ($9.40).
The 4-hour chart shows that the bears are offering strong resistance at $12, but a positive sign is that the bulls have not allowed the price to drop below the 50-SMA. The rising moving averages and the RSI near the midpoint give the bulls a slight edge.
A break above $12 completes an inverse head and shoulders pattern. This bullish setup has a target of $13.31. Conversely, if the price declines and breaks below the 50-SMA, it will clear the way down to $9.50.
Filecoin price analysis
Filecoin (FIL) declined from $5.67 on November 13 but has since leveled off again. This shows that low levels are being bought.
The FIL/USDT pair is trying to form a cup and handle, which will complete the break and close above $5.67. If that happens, the pair will signal the start of a new move. The target of the reversal setup pattern is $8.41.
However, the bears are not easily discouraged. They make a strong challenge at $6.50 and again at $7.40. If the price declines and falls below the 50-day SMA ($4.61), this bearish outlook will become invalid in the near term.
The bulls pushed the price above resistance at $5.67 but failed to sustain higher levels. Taking advantage of the situation, sellers are trying to attract and maintain the price below $5.67. If they succeed, the pair may descend towards the 20-EMA. This remains an important support to follow.
If the price recovers from the 20-EMA, it will improve the resistance above $6.20. A break above this resistance indicates the start of the next leg of the uptrend. On the downside, a break below the 20-EMA could open the doors to a decline to $4.40.
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MultiversX price analysis
MultiversX (EGLD) rejected resistance above $70 on December 12 and reached the 20-day EMA ($55) on December 16.
A retracement of the 20-day EMA indicates that the sentiment is bearish and traders are buying on dips. The bulls will try to push the price towards $70, which will remain an important resistance to maintain in the near term. If buyers overcome this hurdle, the EGLD/USDT pair could rally to $90 and then $100.
Meanwhile, sellers may have other plans. They try to sell the rallies and take the price below the 20-day EMA. If they manage to do that, it would signal the start of a deep correction to the 50-day SMA ($46).
The pair has recently taken support near $57 twice, making it an important level to watch in the near term. A break and close below this level could open the doors to a fall to $48.
On the contrary, if the price changes from the current level or strong support at $57 and rises above $64, it indicates the benefit of the bulls. This rally will push it to $70, which could witness a fierce battle between the bulls and the bears.
Algorithm value analysis
Buyers will have difficulty moving Algorand (ALGO) above the sell resistance above $0.22, but the positive sign is that there is not much room left. This shows that the bulls anticipate another leg higher.
Both moving averages are trending up, and the RSI is in the positive territory, indicating that the bulls are in command. Buyers should buy dips to the 20-day EMA ($0.18). If the price recovers from the 20-day EMA, the bulls will again try to overcome the barrier at $0.22.
If they do that, the ALGO/USDT pair could rise to $0.24 and then to $0.28. If the pair slips and closes below the 20-day EMA, this positive view is worthless in the near term. That indicates the start of a deeper correction to the 50-day SMA ($0.14).
The pair has been range-bound between $0.18 and $0.22 for some time. The 20-EMA has started to decline, and the RSI has entered the negative zone, increasing the possibility of a fall to $0.18.
Buyers are expected to effectively protect the $0.18 level as a break below it would complete the triple-high pattern. This bearish setup target is $0.14.
If the price rebounds strongly from $0.18, it indicates aggressive buying on dips. The pair may rise to the 20-EMA and then to $0.22. A break and close above $0.22 indicates the start of the next leg of the move.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.