PayPal’s announcement regarding its cryptomone currency acted as a trigger that brought the price of Bitcoin (BTC) to a new 52-week high. During such news-based events, traders holding short positions were caught off guard and forced to hedge their trades, resulting in the kind of bearish contraction that was seen during the October 21 rally.
However, after this initial explosion, the next stage of the uptrend is only possible if demand recovers and bullishers continue to buy at higher levels.
Huobi exchange data suggests that professional traders are not convinced that the current rally justifies opening long positions, and Cointelegraph’s collaborator Marcel Pechman explained that this could be a downward signal.
On the other hand, the open interest in CME’s Bitcoin futures paints a different picture. The WEC has now become the second largest Bitcoin futures market in terms of open interest, second only to OKEx. This suggests that institutional demand may be picking up.
This opposite set of data from the Bitcoin futures exchanges only increases confusion among traders about the next possible move.
Let’s dig a little deeper into trader psychology for a better understanding. Institutional investors rarely buy because of FOMO, as they are generally more reluctant.
These big traders can wait for the rally to continue and complete a new successful breakout level test before buying.
Let’s take a look at the top 10 crypto currencies to determine what the technical indicators are projecting.
The Bitcoin price (BTC) exploded and closed above the USD 12.460 resistance on October 21. This move helped the kryptonie reach a new 52-week high, which is a sign of strength.
The 20-day moving average (USD 11,679) is increasing and the 50-day simple moving average (USD 10,943) has also begun to rise. This shows that both the short and medium term trends are in favour of the upside.
However, the rally above USD 13,000 pushed the relative strength index close to 81, a level that attracted the profit reserve the last two times it was reached.
The BTC/USD is facing selling above USD 13,000, but the bulls do not appear to be in a hurry to close their positions. If the pair does not fall below USD 12,460 in the next few days, the possibility of a rebound to USD 14,000 will increase.
Conversely, if bearishers can get the price below the USD 12,460-USD 12,050 support zone, it will suggest a lack of demand at higher levels. Such a move will suggest that the current breakout was a bearish trap.
Ether (ETH) exploded and closed above USD 395 on 22 October. This move completed the upward triangle pattern, which has a target of USD 478.
The 20-day EMA on the rise (USD 377) and the RSI in positive territory suggest that bullish players have the upper hand.
If successful, it will indicate that the current breakout was false. If they are successful it will indicate that the current breakout was false.
Conversely, if the ETH/USD bounces off the USD 395 level, it will suggest that the breakout is valid. The uptrend could gain momentum after the bulls push the price above USD 421.
XRP attempted to rise above the USD 0.2295-USD 0.26 range on 21 October, but the bullish side was unable to close the price above USD 0.26. This suggests a lack of buyers at the higher levels.
The fact that the XRP/USD did not move out of range could have attracted the profit reserve. If the price breaks below the moving averages, it will suggest that the stock within the range is likely to extend for a few more days.
Contrary to this assumption, if the price bounces off the 20-day exponential moving average (EMA) (USD 0.24), bullishers will once again attempt to move the pair above the USD 0.26 resistance zone to USD 0.265763.
A breakout and a close (UTC time) above the resistance zone will complete a reversed shoulder-head-shoulder pattern that could signal the beginning of a new uptrend with a USD 0.30 target.
Bitcoin Cash (BCH) is currently facing a sale near the general resistance at USD 280. This shows that the bearishers are trying to keep the price below this level. If successful, a drop to the 20-day EMA (USD 247) is possible.
However, the rising 20-day EMA and the RSI near the oversold zone suggest that the path of least resistance is upward.
If the bulls can push the price above USD 280, a move to USD 300 is possible. This level could act as a resistance, but if the bulls can push the price above it, the BCH/USD could resume the uptrend and reach USD 326.30- USD 337.90.
This bullish view will be invalidated if the pair falls from the current levels and breaks below the critical support at USD 242.
Binance Coin (BNB) crossed the bearish trend line on October 22nd. This suggests that the correction may be over. Rising moving averages and the RSI above 56 suggest that the bullish side has the upper hand.
If bullish drivers can push the price above USD 31.9798, a new test of the 52-week peak at USD 33.3888 is possible. A breakout and a close above this level could resume the uptrend that may challenge the historical peak of USD 39.5941.
This upward view will be invalidated if the price continues to fall from current levels and falls below USD 28.50. Such a move could initiate a deeper correction to USD 22.
Chainlink (LINK) completed an upward triangle pattern when it broke and closed above USD 11,8028 on 22 October. The target for this bullish configuration is USD 15.
The 20-day moving exponential average (MEA) gradually rising (USD 10.71) and the Relative Strength Index (RSI) above 57 suggest that the bullish side has the upper hand.
The 20-day moving average (EMA) is gradually rising (USD 10.71) and the Relative Strength Index (RSI) is above 57, suggesting that the upside has the advantage. They are currently trying to drag the price below the USD 11,199 – USD 11,8028 support zone. If they manage to do so, it will suggest that the current breakout was a bullish trap.
On the other hand, if the bears fail to hold the price below the support zone, it will indicate that the bulls are accumulating in declines. This could increase the possibility of a rally to USD 13.28 or higher.
Polkadot (DOT) closed above the 20-day EMA (USD 4.17) on 22 October. Bullish market participants will now attempt to push the price above the upper resistance level of USD 4.6112. A close above this resistance could take the price to USD 5.5899.
The 20-day EMA has stabilised and the RSI has risen above 50 levels for the first time in over a month. This suggests that selling pressure has been reduced and the bulls are attempting to return.
However, if the price falls below the 20-day EMA again, the DOT/USD could extend its stay within the range for a few more days. The pair could turn negative if the bearishers drop the pair below the critical support level of USD 3.5321.
Litecoin (LTC) completed a reverse shoulder, head and shoulder pattern when it burst and closed above the USD 51-USD 52.36 resistance zone. The target pattern of this upward reversal configuration is USD 61.
The 20 day upward EMA (USD 49) and the RSI near the overbought zone suggest that the bullishers are in control.
However, after the initial rise, the price may test the breakout zone again from USD 51 to USD 52.36. If the bullish side buys the drop in this zone and the price recovers sharply, it will suggest that the zone may act as a floor in the future.
This bullish view will be invalidated if the bears drag and hold the LTC/USD below USD 51. Such a move will suggest that the current breakout was a bullish trap.
Cardano (ADA) has been operating in a rising wedge pattern for the past few days. The bullish market has failed to push the price above the immediate resistance at USD 0.1142241, showing a lack of demand at higher levels.
The upward wedge is generally considered a bearish configuration. The pattern will be completed when the price falls and closes below the wedge support line. Such a move could drag the price down to USD 0.090 and then to USD 0.0755701.
However, the rising 20-day EMA (USD 0.10) and the RSI in the positive zone suggest a smaller advantage for the bullish side. If buyers can push the price above the wedge, the ADA/USD could begin an upward movement that could reach as high as USD 0.01445.
Bitcoin SV (BSV) has formed a symmetrical triangle pattern, showing indecision between the upside and downside. Although the bulls had pushed the price above the triangle on 22 October, they were unable to sustain the higher levels.
The price has dropped from the downward trend line and the bearishers will now attempt to push the BSV/USD pair down to the upward trend line of the triangle. If this support is broken, a fall to USD 146.20 is possible.
Conversely, if the pair bounces off the upward trend line, bullishers will once again attempt to push the price above the triangle. If they can achieve this, a rise to $180.63 and then $227 may be within the possibilities.