There has been a lot of volatility in the cryptocurrency market over the past seven days, as the price of Bitcoin (BTC) and Dogecoin (DOGE) is skyrocketing only due to the activity on social media. In situations like this, traders who make investment decisions based on emotion usually suffer big losses, and this is exactly what happened last week.
The recent Dogecoin (DOGE) infusion and dump operation saw many new traders who bought through FOMO lost their money in a short amount of time, and this scenario is likely to repeat itself when social media groups decide that massive pumping of all currencies is a new way to invest.
A similar trend appears to be developing in Bitcoin (BTC), which retraced much of the bullish move caused by the Elon pump on January 29th. This shows that, with the exception of some emotional buyers, most professional traders may have used rallies to weaken their long positions.
Lennard Neo, head of research at Stack Funds, believes bitcoin miners are being sold in collections, a trend that could continue as the Chinese New Year approaches. Neo expects the bitcoin price to remain volatile in the short term.
Even with the cost of bitcoin consolidation, decentralized financial tokens continue to rise, indicating a shift in trading focus towards the DeFi space. Let’s take a look at the cards of the top 5 cryptocurrencies that may be trending in the next few days.
Bitcoin / US dollar
Bitcoin’s long week on January 29 shows that the bears were selling strongly behind the descending line in the descending triangle. This was followed by a January 30 Doji candlestick, indicating a swing among bulls and bears.
The inability of the bulls to push the price above the downtrend line has increased further selling today. Björn is currently trying to keep the price below the 20-day exponential moving average ($ 33,395).
If successful, the BTC / USD pair could drop to a 50-day simple moving average ($ 30,631) and then to $ 28,850.
A break and close below $ 28,850 will complete the Descending Triangle pattern with a target of $ 15,741. 42 and again 61.8% retracement at $ 22,106.73.
This negative forecast will become invalid if the price rises above the current level or rebounds from the support at $ 28,850 and continues to move down the descending line. This move suggests a strong build-up at lower levels, which could lead to a rally to $ 40K.
The 4-hour chart shows that the break above the downtrend met strong selling pressure and the price quickly entered the triangle.
The inability of the bulls to push the price above the downtrend again attracted sell-offs and the bears pulled the price back during the 20 EMA. The bulls are currently trying to protect the 50-SMA, but if that support breaks as well, the pair could start the journey for $ 28,850.
These negative outlook will be canceled if the price returns from the current level and rises above the descending line. Such a move could bring the price down to $ 38,519.63.
ETH / USD
ETH broke above $ 1400 resistance three times, but the bulls were unable to hold the break, indicating gains at higher levels. However, on a positive note, the Bulls have not given up much in recent days. This indicates that bulls are accumulating on dips.
On January 30, the Ethereum / USD pair formed a Doji candlestick pattern, which indicates uncertainty. This reluctance has eliminated the lack today and the pair may now fall to the 20-day moving average ($ 1253), which is likely to serve as strong support.
A rebound from support will indicate a continuation of the bullish trend, and traders will buy it when it falls. Then the bulls will try to resume the trend. If the bulls manage to push the price above the $ 1,400 resistance zone to $ 1,473,096, the pair could rise to $ 1,675 and then $ 2,000.
This bullish opinion will be invalid if the price falls below the 20-day moving average and uptrend line. In this case, the pair could fall to the 50-day simple moving average ($ 990).
The 4 hours chart shows the formation of an ascending triangle pattern that will end on the breakout and close above $ 1,440. This bullish setup targets $ 1,768.