A few years ago, the price of bitcoin (BTC) was dominated by whales as the cryptocurrency market lacked depth and was relatively liquid. If whales sell in chorus, no one will take the risk and buy. In the same way, the coordinated purchase of whales easily drove up prices.
However, this is no longer the case. It seems that whales are gradually losing the opportunity to influence the price of BT with the arrival of institutional investors.
According to the network, Grayscale Investments bought about double the bitcoins mined in November. A steady stream of institutional funds has increased Grayscale’s bitcoin asset management to over $ 10.5 billion dollars.
Some investors wonder why institutions buy bitcoin when the price is approaching record levels, but it should be noted that institutional investors usually buy in the long run. The fact that they buy close to all-highs shows that they believe that the price of bitcoins will be much higher for several years.
Legendary investor Paul Tudor Jones said the current market value of cryptocurrencies, which is around $ 560 billion, is negligible compared to the stock market’s $ 90 trillion and “God knows how many trillions of fiat currencies.” For the next two decades, Jones expects everyone to use a “type of digital currency”.
With so much potential going forward, it is easy to believe that cryptocurrency prices will only increase, but this is a common misconception. At each stage of the bull, sharp corrections will occur, and eventually the prices of cryptocurrency will fall. These are opportunities that smart individuals and institutional investors will look for.
Let’s analyze charts of the top 10 cryptocurrencies to determine the critical levels of support to which the price may bounce.
Bitcoin / US dollars
Bitcoin (BTC) is on an upward trend and is currently consolidating near its upper resistance zone from $ 19,500 to $ 20,000. The bears strongly defend the area, but on a positive note, the bulls have not left many countries.
This indicates that the bulls do not close their positions quickly and buy with every little drop. Bullish moving average indicates that the bulls are in control.
The only downside to the chart is the negative divergence in the Relative Strength Index (RSI). Although this layout requires caution, it is invalid in strong trends, so you should not act on this layout alone.
If the bulls can push the price above $ 20,000, the next level to look at will be $ 22,727 followed by $ 25,000.
The first sign of weakness will be a break below the 20-day exponential moving average ($ 18,013), and the BTC / USD pair may initiate a deeper correction if the support is $ 17,200.
ETH / USD
ETH has consolidated its resistance at $ 622,807 in recent days. Generally, a close hold close to resistance is a positive sign because it indicates that the bulls are not making strong gains as they expect the bullish move to resume.
If the bulls hold above $ 560, the probability of a break over the resistance zone increases from $ 622,807 to $ 635,456. Above this level, the ETH / USD pair may resume the uptrend and rise to $ 800.
Contrary to this assumption, if the bulls fail to break through even after repeated attempts, it may attract short-term traders to make a profit and sell aggressive bears.
If the price falls below the 20-day moving average ($ 548), it indicates weak upward momentum. Below this level, the pair may fall to $ 488,134.
XRP / US Dollar
XRP is currently correcting for an upward trend. The alternative currency has deviated from the downward line, and if the price falls below $ 0.574, the alternative currency may fall to the 20-day moving average of $ 0.521.
In an uptrend, bulls usually buy on dip to the 20-day moving average. If the price bounces off the 20-day EMA, it will indicate that the sentiment is still bullish. Buyers will then try to push the price over the downward line.
If successful, the XRP / USD pair may rise to $ 0.6794 and then to $ 0.780574. On the other hand, if the price falls below the 20-day moving average, a deeper correction is possible to $ 0.4365.
LTC / USD
Litecoin (LTC) is consolidating in an upward trend. The price has been stuck between the $ 84,3374 support and the $ 93.9282 resistance for the past two days, but the Bears are currently trying to keep the price below the support.
If the bears manage to do this, the LTC / USD pair may fall to the 20-day moving average ($ 78). If the price returns from this level, the bulls will try to push the pair over $ 93.92 again.