Bitcoin (BTC) has consolidated close to $23,000 in recent days. The next big question on the minds of investors is whether the rally is over or whether Bitcoin will resume its recovery.
Bitcoin’s strong rally since the start of the year has made several analysts bullish in the near term. They expect Bitcoin to extend its upward movement and reach $25,000 and even $30,000.
For the slightly longer term, however, analysts seem divided. Commenting on TSTIME, economist Lyn Alden said Bitcoin could be at “significant risk” in the second half of 2023 as liquidity risks mount.
On the other hand, Cathie Wood, CEO of ARK Invest and chief investment officer, said in a corporate video blog on Jan. 23 that crypto assets could experience a massive turnaround in 2023 as the Fed pivots due to falling inflation.
What are the critical support and resistance levels to watch out for? Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin has witnessed a seesaw battle near $22,800. The bears want to slow the advance at this level, but the bulls are not willing to surrender.
The rising 20-day exponential moving average ($20,700) and relative strength index (RSI) in the overbought zone suggest bulls have the upper hand. Buyers will need to kick the price above $23,371 to begin the next leg of the rally to $25,211.
If the price drops from its current level and goes below $22,292, it could trigger the stops of several short term traders. That could intensify sales and the BTC/USDT pair could plunge to USD 21,480.
If the price bounces off this level, the bulls will try again to resume the upward movement. The near term trend could turn bearish below USD 20,400.
After forming Doji candlestick patterns on Jan. 22 and Jan. 23, Ether (ETH) fell sharply on Jan. 24, indicating that the uncertainty in favor of the bears had resolved.
The ETH/USDT pair corrected towards the 20-day EMA ($1,496) on Jan. 25, which is a crucial support to watch. If the price bounces off this level, it will suggest that sentiment remains positive and traders are close to buying support.
The pair could then retest resistance at USD 1,680. A break above this level could signal the start of the next leg of the upward movement. The pair could first rise to $1,800 and then rise to $2,000.
This bullish view may be negated in the near term if the price dips below the 20-day EMA. The pair could then drop to USD 1,352.
BNB (BNB) rose $318 above the overhead barrier on Jan. 24, but the bulls couldn’t sustain the breakaway as seen from the long pit on the day’s candlestick.
The bulls bought the dip to the 20-day EMA ($290) on Jan. 25 as seen from the long tail on the candlestick. This suggests that the BNB/USDT pair could fluctuate between the 20-day EMA and $318 as the bulls and bears try to assert their supremacy.
If the price rises above $318, it indicates that the bulls have overpowered the bears. That could catapult the pair to $360. Conversely, a collapse below the 20-day EMA could tip the advantage in the bears’ favor. The pair could then dive into the 50-day SMA ($270).
XRP (XRP) broke above the $0.42 overhead resistance on Jan. 23, but that turned out to be a bull trap. The bears pulled the price back below the breakout level on Jan. 24.
The critical level to look down on is the 20-day EMA ($0.38). If the price bounces back from this support, it will indicate that lower levels continue to attract buyers. The bulls will then try to take the price above the $0.42 to $0.44 zone. If they succeed, the XRP/USDT pair could see an upward move towards USD 0.51.
If bears want to strengthen their position, they will need to drag the price below the 20-day EMA. That could entice short-term traders to post profits and the pair could drop as low as the 50-day SMA ($0.37).
The Cardano (ADA) rally appears to have hit a wall at $0.38. Between January 22 and 24, the bears repeatedly thwarted the bulls’ attempts to overcome this barrier.
The RSI is showing signs of a negative divergence, indicating that bullish momentum could slow. Sellers could further strengthen their position if they pull and hold the price below the 20-day EMA ($0.34). The ADA/USDT pair could drop first to $0.32 and then to the 50-day SMA ($0.30).
However, if the price rises and moves above $0.38, the negative divergence will be negated. The pair could then travel to $0.44.
Dogecoin (DOGE) has faced strong resistance at $0.09. The price fell again from this level, falling to the 20-day EMA ($0.08) on January 24.
If the price continues lower and moves below the moving averages, it suggests that the bulls may be losing traction. The DOGE/USDT pair could then extend its stay within the $0.07 to $0.09 range for a few more days.
On the contrary, if bulls want to maintain their advantage, they will need to quickly propel and hold the price above $0.09. That could open the doors for a rally to $0.11, which could again act as a formidable resistance.
The bulls tried again to push Polygon (MATIC) above the overhead resistance at $1.05 on Jan. 24, but the bears didn’t budge. That pulled the price down to the 20-day EMA ($0.93).
If buyers want to maintain the upper hand, they will need to vigorously protect the 20-day EMA. The MATIC/USDT pair, on the other hand, could rise again towards USD 1.05. Usually a tight consolidation near a stiff overhead resistance resolves upwards. If that were to happen, the pair could rise to USD 1.16 and then to USD 1.30.
Contrary to this assumption, it will suggest that if the price drops and drops below the 20-day EMA, the pair could remain stuck within the range between $0.69 and $1.05 for some time to come.
Related: Six on-chain metrics that suggest Bitcoin is a ‘generational buying opportunity’
Litecoin (LTC) remains in a strong uptrend. Buyers pushed the price above $93 on Jan. 23, but the bears sold at higher levels as seen from the long wick on the day’s candlestick.
The price has retreated to the 20-day EMA ($84), which is likely to act as a strong support. Buyers will need to push and hold the price above $92 to signal the resumption of the upward movement. The LTC/USDT pair could then jump to $100 and later to $107.
If, on the other hand, the price falls from the current level or overhead resistance and moves below the 20-day EMA, it will suggest that traders are making profits. That could trigger a correction at the $75 breakout level.
Polkadot (DOT) bumped above the resistance line on January 23-24, but the bulls were unable to sustain the higher levels. This suggests that bears are selling on rallies.
While the rising 20-day EMA ($5.73) indicates an upside for buyers, the negative divergence on the RSI suggests that bullish momentum may be weakening.
If the price rebounds with force from the 20-day EMA, it could increase the chances of a break above the resistance line. The DOT/USDT pair could then rise to USD 7.42 and later to USD 8.05.
The bears will gain the upper hand if they sink the price below the 20-day EMA. That could start a deeper correction to $5.50 and below that to the 50-day SMA ($5.08).
Avalanche (AVAX) was rejected from the resistance line on Jan. 24, indicating that bears are aggressively defending this level.
The key support to look down on is the 20-day EMA ($15.79) as bulls are expected to buy the dips to this level. If the price rebounds from the 20-day EMA, the buyers will again attempt to clear the overhead hurdle. If they succeed, the AVAX/USDT pair could rise to $22 and then $24.
This positive outlook may become invalid in the near term if the price drops and falls below the 20-day EMA. The pair could then drop to the 50-day SMA ($13.48).
The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of TSTIME.
This article does not contain any investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.