Bitcoin price is targeting $25,000 and holding this level could trigger breakouts in ADA, UNI, LINK and CHZ.
The S&P 500 advanced for the fourth week in a row as investors welcomed signs that inflation may have peaked. Bitcoin (BTC) and some altcoins have also extended their recovery period, which suggests that investors are increasing their exposure to risky assets.
A similar trend has played out in the cryptocurrency markets. According to Glassnode analysts, altcoins led by Ethereum (ETH) have outperformed Bitcoin after the Ethereum merger situation was cleared up.
Daily view of cryptocurrency market data. Source: Coin360
However, trading firm QCP Capital is wary of the dynamics of the altcoin market. They highlighted that open interest in Ethereum options rose to $8 billion, surpassing the OI of a $5 billion Bitcoin option. Glassnode suggested that traders took profits from the spread between their spot Ether long positions and quarterly short Ether futures positions.
Can Bitcoin and altcoins extend their recovery over the next few days? Let’s examine the charts of the top 5 cryptocurrencies that can do well in the short term.
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Bitcoin surged above the upper resistance level of $24,668 on August 13-14, but the bulls were unable to sustain the higher levels. This suggests that bears are selling on rallies, but repeated breaks of upper resistance tend to weaken them.
BTC/USDT daily chart. Source: Trading View
A gradual rise in the 20-day exponential moving average at $23,414 and the Relative Strength Index (RSI) in positive territory suggests the path of least resistance is on the upside. If the bulls keep the price above $25,000, the momentum could pick up even more and the BTC/Tether (USDT) pair could rise to $28,000.
This level can act as tough resistance, but if the bulls break through this hurdle, the rally could extend to $32,000. The critical level to look out for is the 20-day EMA. A bounce off this indicates that sentiment remains positive and traders are buying dips.
Conversely, if the price turns down from current levels and falls below the 20-day EMA, this would mean that the bears will remain active at higher levels. The pair could then drop to the 50-day SMA of $21,976.
4-hour BTC/USDT chart. Source: Trading View
The $24,668 level is witness to an uphill battle between bulls and bears. Rising moving averages point to upside potential for buyers, but a negative divergence on the RSI suggests momentum may be waning.
If the price breaks below the 20-EMA, this would mean a slight advantage for the bears. The pair could then fall to the 50-SMA and then to $23,600. Alternatively, if the price points up from the 20-EMA and rises above $25,050, the up move could resume.
Cardano (ADA) broke to close above the upper resistance level at $0.55 on August 13. This suggests that the uncertainty has dissipated in favor of the bulls.
Daily ADA/USDT chart. Source: Trading View
The rising 20-day EMA at $0.52 and the RSI in positive territory suggest that the bulls have the upper hand. The ADA/USDT could rise to $0.63 and then to strong upside resistance at $0.70. This level is likely to attract strong selling from the bears.
Contrary to this assumption, if the price deviates from current levels and falls below the 20-day EMA, this would mean that a break above $0.55 could be a bull trap. The pair could then fall to the 50-day SMA of $0.49 and then to $0.45.
ADA/USDT, 4-hour chart. Source: Trading View
The pair completed an ascending triangle pattern on a breakout and closed above upper resistance at $0.55. This pushed the RSI on the 4-hour chart to overbought levels, which could encourage short-term traders to take profits.
The price may drop to the $0.55 breakout level. If the bulls turn this level into support, the pair could continue its upward movement towards the $0.65 pattern target. This bullish view may be invalidated in the short term if the price falls below the uptrend line.
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