Bitcoin’s (BTC) dominance has dropped from about 48% on Oct. 20 to 42.3% on Nov. 7 while the total crypto market capitalization has continued its northward journey. This indicates that the price action has shifted from Bitcoin to altcoins.
CryptoQuant CEO Ki Young Ju said that Bitcoin whales are selling but this has not resulted in the breach of the strong support at $60,000. He also pointed out that Bitcoin reserves across exchanges have continued to decrease, indicating strong appetite from buyers.
Real Vision founder Raoul Pal also projected a bullish picture for cryptocurrencies in an interview on Nov. 3. He said the current bull run is unlikely to top out in December of this year and may extend to between March and June of the next year. Pal anticipates the possible launch of Ethereum 2.0 and the likelihood of an Ether (ETH) exchange-traded fund being green-lit in the first half of 2022 will attract institutional investors and trigger a massive rally.
In this bullish backdrop, let’s analyze the charts of the top-5 cryptocurrencies that may remain in focus and outperform in the short term.
BTC/USDT
Bitcoin broke above the bullish flag pattern on Nov. 2 but the buyers could not capitalize on this move and push the price above the overhead resistance zone at $64,854 to $67,000. This indicates the bears have not yet given up and are attempting to stall the up-move.
If they can pull it off, the bullish momentum may pick up and the BTC/USDT pair is likely to rally toward the pattern target at $89,476.12.
This bullish view will invalidate if the price breaks and dips back into the flag pattern. The pair may then drop to the 50-day simple moving average ($54,883). The zone between the 50-day SMA and $52,920 is likely to attract strong buying support from the bulls.
If the price rebounds off the moving averages, the bulls will again attempt to propel the price above the overhead resistance zone between $63,732.39 and $64,270. If they manage to do that, the pair may retest the all-time high.
Conversely, a break below the moving averages could pull the pair to the strong support zone at $59,500 to $58,000. The bears will gain the upper hand if this zone is breached. The pair could then correct to $55,267.61.
DOT/USDT
Polkadot (DOT) soared and broke above the overhead resistance at $49.78 on Nov. 1. The RSI broke above the downtrend line, invalidating the negative divergence. This suggests the resumption of the uptrend.
If bulls thrust the price above $55.09, the DOT/USDT pair could rally to $63.08. The bears may have other plans as they will attempt to sink the price below the breakout level at $49.78. Such a move will suggest a lack of buyers at higher levels.
A break and close below the 20-day EMA ($46.82) will be the first sign that the bulls may be losing their grip. The pair could then drop to the 50-day SMA ($38.54).
The pair rebounded from the centerline of the channel and the bulls will again try to clear the overhead hurdle. If they succeed, the pair may pick up momentum.
Alternatively, if the price turns down from the current level or the overhead resistance and breaks below the centerline, the pair may drop to the support line. A bounce off this level will keep the uptrend intact but a break below it will signal a possible change in trend.
LUNA/USDT
Terra protocol’s LUNA token broke and closed above the overhead resistance at $49.54 on Nov. 4. The bears tried to pull the price back below the breakout level on Nov. 5 and 6 but could not sustain the lower levels. This suggests that the bulls are buying on dips.
Alternatively, if the price turns down from the current level or the overhead resistance, the pair may drop to the support line of the wedge. A break and close below this support will signal a possible change in trend. The pair could then drop to $35.
Both moving averages on the 4-hour chart are sloping up and the RSI is in the positive territory, indicating advantage to buyers. If bulls drive the price above $53.18, the pair may rally to the pattern target at $62.59.
Related: Bitcoin consolidates right below Fib level that triggered 2013 all-time highs
AVAX/USDT
After trading near the overhead resistance at $79.80 for the past three days, Avalanche (AVAX) has broken above the barrier. This indicates the possible resumption of the uptrend.
Contrary to this assumption, if the price turns down from the current level and dips back below $79.80, it will suggest that markets have rejected the higher levels. The pair could then drop to the 20-day EMA ($69.51).
The first important level to watch on the downside is $79.80. A bounce off this level will indicate that bulls are aggressively buying on dips and that will increase the likelihood of the resumption of the uptrend.
Conversely, a break below $79.80 could sink the pair to $72. A break below this support will suggest that bears are back in the game.
EGLD/USDT
Elrond (EGLD) broke above the previous all-time high at $303.03 on Nov. 3, which is a positive sign. The bears tried to pull the price back below the breakout level on Nov. 5 and 6 but failed.
Contrary to this assumption, if the EGLD/USDT pair turns down from the current level and breaks below $303.03, the next stop could be the 20-day EMA. A strong rebound off this support will keep the uptrend intact but a break below it could open the doors for a deeper correction to the 50-day SMA ($249).
A break below the 20-EMA will be the first sign of weakness. That could pull the price down to the breakout level at $303, which is an important support for the bulls to defend. If this support cracks, the pair may drop to the 50-SMA and then to the trendline of the triangle.
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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