Top 5 cryptocurrencies to watch this week: BTC, SOL, AVAX, ALGO, AXS
Bitcoin (BTC) continues to face strong selling as bulls attempt to flip the psychological level at $60,000 into support. Some analysts believe that Bitcoin could enter a correction as traders book profits following the successful launch of last week’s Bitcoin exchange-traded funds.
In the past, the launch of the Bitcoin Futures product by the Chicago Mercantile Exchange on Dec. 18, 2017, ended a strong bull run and marked the start of a multi-year bear market. A similar crash of a lesser magnitude was seen after the Coinbase IPO (COIN) on April 4, 2021. This suggests that the old adage “buy the rumor, sell the news” could be at risk of repeating once again.
However, several analysts are unperturbed by the pullback. Crypto market intelligence firm Decentrader said that “there are zero instances of Bitcoin breaking significant previous all-time highs and failing to continue higher.” They anticipate the Bitcoin bull run to continue with a possible target objective at $72,000 and then $88,000.
Not that every metric is flashing bullish at the moment. Data from Bybt shows that Bitcoin reserves rose to 400,000 Bitcoin on Binance, suggesting that traders may be looking at closing their positions.
Could Bitcoin stage a strong comeback that boosts sentiment in the crypto sector? Let’s analyze the charts of the top-5 cryptocurrencies that could remain in focus in the next few days.
BTC/USDT
Bitcoin has faced a strong rejection in the $64,854 to $67,000 zone. The price could drop to the 20-day exponential moving average ($58,315) which is a key level to watch out for. If the price bounces off this level with strength, it will signal that sentiment remains positive and traders are buying on dips.
The bulls will then make one more attempt to push the price above the overhead zone. If they can pull it off, the BTC/USDT pair may resume its uptrend. The pair could then rally to its target objective at $84,533.12.
The upsloping moving averages and the relative strength index (RSI) in the positive zone indicate that buyers have the upper hand.
Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will suggest that the break above $64,854 may have been a bull trap. The pair could then continue its slide to the 50-day simple moving average ($50,927).
The pair is correcting inside a descending channel. The immediate support is at $58,739.17 and if this level cracks, the pair could drop to the support line of the channel. This is an important level for the bulls to defend because a break below it could intensify selling.
The 20-EMA has turned down and the RSI has dipped into the negative territory, indicating that bears have the upper hand. This negative view will invalidate if the price breaks above the channel and the moving averages. Such a move will increase the possibility of a retest of the overhead zone.
SOL/USDT
The long wick on Solana’s (SOL) Oct. 22 candlestick suggests that bears are aggressively defending the overhead resistance at $216. The altcoin formed an inside-day candlestick pattern on Oct. 23, indicating indecision among the bulls and the bears.
This uncertainty resolved to the downside today and the price could drop to the breakout level at $177.79. If the price rebounds off this level, it will suggest that sentiment remains bullish and traders are buying on dips.
The bulls will then again try to drive the price above $216. If they succeed, the SOL/USDT pair could rise to $239.83. The marginally rising 20-day EMA ($168) and the RSI in the positive territory indicate advantage to buyers.
This positive view will be negated if the price continues lower and breaks below the 20-day EMA. That could pull the price down to the trendline of the triangle.
The bears have pulled the price below the 20-EMA on the 4-hour chart. If sellers sustain the price below the 20-EMA, it will suggest that the bullish momentum has weakened. The pair could then slide to $177.79 where buying may emerge.
The first sign of strength will be a break and close above the downtrend line. Such a move will suggest that traders are buying on dips. That could push the price to $205.78 and if this resistance is crossed, the pair may rally to the all-time high.
AVAX/USDT
Avalanche (AVAX) broke and closed above the descending channel on Oct. 21, suggesting that the correction may be over. The bulls will now try to resume the uptrend.
The long wick on the Oct. 22 and 23 candlestick suggests that demand dries up at higher levels. The AVAX/USDT pair could decline to the moving averages.
A strong rebound off this support will suggest that traders continue to buy on dips. The bulls will then make one more attempt to resume the up-move by pushing the price above $69.18. If they succeed, the pair could rally to $73.41 and then retest the all-time high at $79.80.
Contrary to this assumption, if the price breaks below the moving averages, the pair could drop to the strong support at $51.04. If this level also gives way, the next stop could be the support line of the channel.
The bulls pushed the price above the downtrend line of the descending triangle, invalidating the bearish setup. However, the recovery was short-lived as bears have pulled the price back below the 20-EMA. This suggests selling at higher levels.
The pair could now drop to the 50-SMA. If this support is breached, the bears will try to pull the price back into the triangle. If that happens, it will suggest that the breakout above the triangle was a bull trap.
On the contrary, if the price rises from the current level or rebounds off the downtrend line, it will indicate that bulls are accumulating on dips. The buyers will then try to propel the price above $69.18. A break and close above this resistance will signal that bulls have the upper hand. The pair could then start its journey toward the all-time high.
Related: Shiba Inu surges over 45% in two days to reach an all-time high
ALGO/USDT
Algorand (ALGO) has been trading inside a symmetrical triangle for the past few days. The price has turned down from the resistance line of the triangle today, indicating that bears are unwilling to let bulls have their way.
If the price dips below the moving averages, the ALGO/USDT pair could drop to the support line of the triangle. This is an important level for the bulls to defend because if it cracks, the bears will try to pull the price to $1.51 and then to $1.20.
Alternatively, if the price turns up from the current level or the support line and breaks above the triangle, it will suggest that bulls are in control. The pair could then rally to $2.22 and later retest the all-time high at $2.55.
The price is getting squeezed inside the triangle, indicating that the pair could be getting ready for a strong directional move. The crisscrossing moving averages and the RSI near the midpoint do not project a clear advantage either to the bulls or the bears.
A break above the triangle will suggest that bulls have absorbed the selling by the bears and that could set the pair for the resumption of the up-move. Conversely, a break below the triangle will suggest that supply exceeds demand and that could start a deeper correction.
AXS/USDT
Axie Infinity (AXS) has formed a symmetrical triangle pattern, which indicates indecision among the bulls and the bears. It is difficult to predict the direction of the breakout but usually, the triangle acts as a continuation pattern.
If the price rebounds off the support line, the bulls will make one more attempt to push the AXS/USDT pair above the triangle. If they succeed, it will signal a resumption of the uptrend. The pair may then retest the all-time high at $155.27.
The bullish momentum could pick up if buyers clear this overhead hurdle. The pair may then rally toward the pattern target at $186.05.
Conversely, a break and close below the triangle will be the first sign of a deeper correction. The pair may first drop to $103.22 and then to the breakout level at $94.67.
The moving averages have flattened out on the 4-hour chart and the RSI has been oscillating between 40 and 62. This suggests a state of equilibrium where traders are buying on dips to $115 and selling near $140.
A break and close below $115 could signal that the uncertainty has resolved to the downside. That could pull the price down to the pattern target at $90. On the contrary, a break above $140 will signal that bulls are back in the game. The pair may rally to $155.27 and then to the pattern target at $165.
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.
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