Bitcoin (BTC) is going through a tough battle at around $58,000, but that hasn’t stopped some cryptocurrencies from reaching all-time highs. This shows that traders are watching the development of individual coins.
One of the latest top performing major cryptocurrencies was Avalanche (AVAX), which rose more than 120% in November. The coin grabbed the attention of traders ahead of the announcement of accounting firm Deloitte, which plans to build disaster relief platforms on the Avalanche blockchain.
Daily view of cryptocurrency market data. Source: Coin360
As another step illustrating the growth of cryptocurrency adoption, El Salvador President Neb Bukele announced the launch of Bitcoin City that will run on geothermal energy and was originally funded with $1 billion in Bitcoin bonds.
Could strong buying at lower levels push Bitcoin above $60,000 and will cryptocurrency participate in the recovery? Let’s take a look at the charts of the top 5 cryptocurrencies that can grab the attention of short-term traders.
BTC / USDT
Bitcoin reversed its trend from $55,600 on November 19, but the recovery is facing resistance at the 50-day simple moving average ($60,187). The moving averages are on the verge of a bearish cross, while the Relative Strength Index (RSI) is in a negative range, indicating a confident return for the bears.
BTC/USDT daily chart. Source: TradingView
If the price drops below the current level, the bears will try to continue the correction by pulling the BTC/USDT pair below $55,600. If that happens, the next stop could be a strong support area between $52,500 and $50,000.
If the price breaks through this zone, the bulls will try to push the pair above the moving averages and the descending trend line. Such a step will mean that the correction phase may be over. The bulls will then attempt to push the price above the all-time high of $69,000.
On the other hand, a break below the psychological support level of $50,000 could lead to selling as traders rush out. The pair could then drop to $45,000 and then to $40,000.
4 hour BTC/USDT chart. Source: TradingView
The 4-hour chart shows that the bears pulled the price below the strong support level at $58,000, but were unable to take advantage of this advantage. The bulls bought into the downturn and pushed the price back above the 20-exponential moving average.
If the price remains above $58,000, the pair may move up to the downtrend line. A breakout and closing of this resistance may indicate that the bulls have an advantage. The pair could then rise to $62,000 and then to $67,000.
Conversely, if the price breaks below the current level and drops below $55,600, this will signal a possible start of a deeper correction.
AVAX / USDT
The avalanche has a strong upside and has been constantly rising to new heights in recent days. The bulls pushed the price above the 200% Fibonacci extension level at $146.18 today, but today’s candle-long week is showing profit taking at higher levels.
AVAX/USDT daily chart. Source: TradingView
A bullish 20-day (96) EMA indicates bulls are in control, but the RSI near 80 indicates that the rally could heat up in the short term. This could lead to a slight correction or consolidation over the next few days.
If the price drops below today’s level, $110 and then the 20 day EMA could act as strong support. The sharp drop from both levels indicates that the bulls are viewing the decline as a buying opportunity. The pair could then move towards the 261.8% Fibonacci Extension level at $175.58.
Contrary to this assumption, if the price drops below the 20-day moving average, this indicates that traders are rushing to exit. AVAX/USDT can withdraw up to $81.
AVAX/USDT 4-hour chart. Source: TradingView
The pair fell from $147, indicating strong profit-taking at higher levels. The bears will now attempt to pull the prize towards the 20-EMA, which is likely to provide strong support.
If the price returns from the 20-EMA, this will indicate a strong buying on the downside. The bulls will then attempt to resume the trend by pushing the pair above $147.
Contrary to this assumption, if the price breaks below the 20-EMA, the selling may accelerate and the pair may drop to $110. Such a grip will signal that the bulls may lose it. The pair can then move down to the 50-SMA.