BTC’s attempt to flip $42,000 for support could lure altcoin traders to ETH, NEAR, MANA and LEO.
Bitcoin (BTC) broke the psychological resistance of $40,000 on Feb. 4 and successfully held this level over the weekend. According to CoinGecko, this increased the total cryptocurrency market cap from $1.78 trillion on Feb. 3 to around $2 trillion on Feb. 6.
Senator Ted Cruz’s new financial disclosure reveals he bought Bitcoin’s recent crash on Jan. 25 through River Brokerage. On that day, Bitcoin was trading between around $35,700 and $37,600. If the Texas senator sticks with his purchase, he’s already in the money.
Daily cryptocurrency market data view. Source: Coin360
While the sharp recovery in bitcoin price may have brought relief to bulls, data analyst Material Scientist warned that large traders with ticket sizes over $100,000 are selling the rally.
Can Bitcoin Maintain or Expand Its Gains? If this happens, can altcoins join the party? Let’s take a look at the charts of the top 5 cryptocurrencies that seem poised to move higher in the short-term.
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Bitcoin surged and closed above the 20-day exponential moving average (EMA) of $39,600 on Feb. 4, suggesting the bulls are trying to bounce back. Small range day on February 5 shows that traders who may have bought at lower levels are in no rush to take profits.
BTC/USDT daily chart. Source: Trade View
The Relative Strength Index (RSI) has moved into positive territory, suggesting that the momentum is in favor of the bulls. However, for the BTC/USDT pair, this is likely not a straight up move.
The bears are likely to offer strong resistance in the area between the 50-day simple moving average (SMA) ($42,860) and $44,500.
If the price deviates from the upper zone but does not fall below $39,600, it means the level has inverted to support. Then the bulls will try again to push the pair above the zone. If they succeed, the next stop could be the 200-day SMA ($49,115).
BTC/USDT on the 4 hour chart. Source: Trade View
The 4 hour chart shows an ascending triangle formation which ended with a breakout and closed above $39,320. This bullish setup has a pattern target at $45,722. The price is currently in a tight range of $42,168 to $40,843.
A break and close above this range will signal a resumption of the uptrend. The pair could then scale to $44,500 where the rally could hit a snag. Conversely, if the price turns below $40,800, the pair could drop to a breakout level of $39,320.
Ether (ETH) surged above the 20-day EMA ($2,839) on Feb 4 and met a descending channel resistance line. This level has previously acted as a strong resistance, so the bears may try again to defend it with all their might.
Daily ETH/USDT chart. Source: Trade View
If the price reverses down from the area between the resistance line and the 50-day SMA ($3256), it would mean that the bears will continue to sell at higher levels. The ETH/USDT pair could first drop to the 20-day EMA and then to $2,652.
If the price recovers from this zone, it will indicate a shift in sentiment from selling on a rally to buying on a decline. The bulls will then make another attempt to push the pair above the upper zone. When this happens, a trend reversal may be in order.
Alternatively, a break below $2,652 would mean the pair could trade inside the channel for a few more days.
ETH/USDT 4 hour chart. Source: Trade View
The 4 hour chart shows the price rising within a rising channel pattern. The 20-EMA and 50-SMA have emerged and the RSI is floating in the positive territory, suggesting that the bulls have the upper hand.
If the bulls push the price above the channel, momentum could build and the pair could rally to $3,400 where the bears are likely to face stiff resistance. Conversely, if the price breaks below the 20-EMA, the pair can drop to the channel’s support line.
The NEAR (NEAR) protocol bounced off the $10-$9.50 psychological support zone and broke the 20-day EMA ($12.58) on Feb 4. The bears attempted to sink the rate on February 5th