Bitcoin is showing signs of profit, resulting in a slight drop in altcoin prices.
PayPal’s crypto announcement acted as a trigger that took the price of Bitcoin (BTC) to a new record of 52 weeks. During these news based events, traders holding short positions are caught off guard and are forced to cover their trades, resulting in the kind of squeeze seen during the October 21st high.
However, after this initial rally, the next leg of the bullish trend is only possible if demand increases and bulls continue buying at higher levels.
Data from the Huobi exchange suggest that professional traders are not convinced that the current bullish trend justifies the opening of long positions and Cointelegraph contributor Marcel Pechman explained that this could be a sign of weakness.
On the other hand, the number of open contracts on CME Bitcoin futures shows a different picture. WEC has now become the second largest Bitcoin futures exchange in terms of open contracts, losing only to OKEx. This suggests that institutional demand may be increasing.
This opposite set of Bitcoin futures exchange data only increases the confusion among traders about the next possible move.
Let’s go deeper into traders‘ psychology for a better understanding. Institutional investors rarely buy for fear of losing the bullish pack.
These big traders can wait for the bullishness to sustain and complete a new successful test of the breakout level before buying.
Let’s take a look at the top 10 cryptomaps to determine what the technical indicators project.
The Bitcoin (BTC) managed a leak and closed above the US$12,460 resistance on October 21. This move helped cryptomoeda reach a new high of 52 weeks, which is a sign of strength.
The exponential 20-day moving average (US$11,679) is rising and the simple 50-day moving average (US$10,943) has also begun to rise. This shows that both the short and medium term trend favour bulls.
However, the rise above US$13,000 pushed the relative strength index to close to 81, a level that attracted profit reserves the last two times it was hit.
The BTC/USD pair faces sales above US$ 13,000, but the bulls do not seem to be in a hurry to close their positions. If the pair does not fall below $12,460 in the next few days, it will increase the possibility of a bullish run to $14,000.
On the contrary, if bears can pull the price below the $12,460-12,050 support zone, this will suggest a lack of demand at higher levels. This move will suggest that the current leak was a bear trap.
Ether (ETH) had a leak and closed above US$395 on October 22. This move completed the upward triangle pattern, which targets US$478.
The 20-day MME on the rise (US$377) and the RSI on positive territory suggest that the bulls are in the lead.
However, bears are currently trying to pull the price back below the $395 escape level. If they are successful, this will signal that the current escape was false. The next support on the downside is the bullish trend line.
On the other hand, if the ETH/USD pair recovers from $395, this will suggest that the breakout is valid. The uptrend may gain momentum after the bulls push the price above $421.
The XRP tried to rise above the US$0.2295-0.26 range on Oct. 21, but the bulls failed to close the price above US$0.26. This suggests a shortage of buyers at higher levels.
The failure of the XRP/USD pair to move out of the range could have attracted profit reserves. If the price falls below moving averages, this will suggest that the range-limited stock will likely extend for a few more days.
Contrary to this assumption, if the price hits the 20-day MME ($0.24), the bulls will again try to drive the pair above the $0.26–0.265763 resistance zone.
A break and close (UTC time) above the resistance zone will complete an inverted head and shoulders pattern that may signal the beginning of a new uptrend with a target of US$0.30.
Bitcoin Cash (BCH) is facing the sale close to overall resistance of US$ 280. This shows that the bears are trying to keep the price below this level. If they succeed, a fall to the 20-day MME ($247) is possible.
However, the MME’s upward slope of 20 days and the RSI near the oversold zone suggest that the path of least resistance is up.
If bulls can push the price above US$280, a move to US$300 is possible. This level may act as resistance, but if bulls can push the price above it, the BCH/USD pair may resume the uptrend and reach $326.30-US$337.90.
This optimistic view will be invalidated if the pair falls from current levels and breaks below the critical support of $242.
The Binance Coin (BNB) had a leak above the downward trend line on 22 October. This suggests that the correction may be over. Rising moving averages and RSI above 56 suggest the bulls are in the lead.
If bulls can push the price above $31.9798, a further test of the 52-week high at $33.3888 is possible. A breakout and closure above this level may resume the uptrend that could challenge the all-time high at $39,5941.
This optimistic view will be invalidated if the price continues to fall from current levels and drops below US$28.50. Such a move could initiate a deeper correction to $22.
The Chainlink (LINK) completed a rising triangle pattern when it broke and closed above US$11,8028 on October 22. The goal of this upward configuration is $15.
The MME’s 20-day gradual slope ($10.71) and RSI above 57 suggest that the bulls are in the lead.
However, bears are not willing to allow bulls to do what they want. They are currently trying to drag the price back below the $11,199-11,8028 support zone. If they can do that, it will suggest that the current escape was a bull trap.
On the other hand, if the bears can’t sustain the price below the support zone, it will indicate that the bulls are piling up in casualties. This could increase the possibility of a high to $13.28 or more.
The Polkadot (DOT) closed above the 20-day MME (US$4.17) on October 22. The bulls will now try to push the price above the overload resistance by US$4.6112. A close above this resistance could push the price to $5.5899.
The 20-day MME has stabilised and the RSI has risen above 50 levels for the first time in over a month. This suggests that selling pressure has reduced and the bulls are trying to make a comeback.
However, if the price drops below the 20-day MME again, the DOT/USD pair may extend its stay within the range for a few more days. The pair may go negative if the bears sink the pair below the critical support of $3.5321.
Litecoin (LTC) completed an inverse head and shoulders pattern when it burst and closed above the US$51-52.36 resistance zone. The standard target of this high reversal configuration is $61.
The rising 20-day MME (US$49) and RSI near the overbought zone suggest that the bulls are in control.
However, after the initial increase, the price can test the escape zone again at US$51- 52.36. If the bulls buy the dive for this zone and the price rebounds sharply, this will suggest that the zone may act as a floor in the future.
This optimistic view will be invalidated if the bears drag and keep the LTC/USD pair below $51. This move will suggest that the current escape was a bull trap.
The Cardano (ADA) has been trading within a growing wedge pattern in recent days. The bulls failed to push the price above the immediate resistance at US$ 0.1142241, which shows a lack of demand at higher levels.
The rising wedge is generally considered to be a low setting. The pattern will be completed when the price drops and closes below the wedge support line. Such a move could drag the price to $0.090 and then to $0.0755701.
However, the 20-day MME rising ($0.10) and the RSI in the positive zone suggest a small advantage for the bulls. If buyers can push the price above the wedge, the ADA/USD pair may initiate a bullish move that could reach $0.01445.
The Bitcoin SV (BSV) has formed a symmetrical triangle pattern, showing indecision between bulls and bears. Although the bulls pushed the price above the triangle on October 22nd, they could not sustain the higher levels.
The price has dropped from the bearish trend line and the bears will now try to sink the BSV/USD pair to the triangle’s bullish trend line. If this support breaks, a drop to $146.20 is possible.
On the other hand, if the pair recovers from the uptrend line, the bulls will again try to push the price above the triangle. If they succeed, a rise to $180.63 and then $227 may be expected.