The relief rally for Bitcoin (BTC) rose above $38,500 on Jan. 29, but bulls are struggling to maintain the higher levels. Bitcoin’s sentiment has closely followed equity market sentiment for the past few days. Therefore, analysts cautioned traders against reading too much into weekend rallies when traditional markets are closed because they could be a trap.
In a recent report, analysts at trading suite Decentrader said they believe a “near-term relief bounce” is possible. The report also highlighted that “Significant buyers” were entering the market, which could result in “a change in the higher time frame trend from bearish to bullish.”
Crypto market data daily view. Source: Coin360
As a result of the recent downturn in Bitcoin, the JPMorgan analysts are now bearish, believing the increased volatility is hampering its adoption among institutions.” In a note, the strategists mentioned that they have reduced their long-term theoretical Bitcoin price target from $150,000 to $38,000.
A continuation of Bitcoin’s recovery could attract bulls to invest in select altcoins. Examine the top-5 coins that could extend recovery in the short term by studying their charts.
A stiff resistance zone has developed between $37,332.70 and $39,600, where Bitcoin is facing a relief rally. This zone is also home to the 20-day exponential moving average (EMA) ($39,475); this makes it important for bears to defend.
BTC/USDT daily chart. Source: TradingView
Bears have the advantage due to the downslope of the 20-day EMA and the negative RSI.
The BTC/USDT pair could gradually decline to $35,507.01 and later re-test the intraday low of $32,917.17 if sellers pull back off the price below $37,332.70. Below $37,332.70, there could be a drop to $30,000.
Alternatively, if the price turns up from the current level and breaks above $39,600, it will suggest a possible change in the short-term trend. The pair could then rally to $43,505 and later retest the 200-day simple moving average (SMA) ($48,833).
BTC/USDT 4-hour chart. Source: TradingView
RSI has risen into the positive zone on the 4-hour chart as the 20-EMA has turned upwards. This indicates that bulls are trying to make a comeback. Price could reach the 200-SMA if buyers drive the price above $39,000.
In contrast, if the price falls below $37,312.70 and turns down, it indicates that bears have not given up yet. They will then try to pull the price down towards the important support of $35,507.01, which the bulls must defend.
The price may bounce off this level if traders are looking to buy on dips. A break above $39,600 might be more likely if traders are seeking to buy on dips.
The price of Chainlink (LINK) has fluctuated between $15 and $36 over the past several months. In recent attempts to break out of the range, bulls have bought at the support and bears have sold at the resistance.
LINK/USDT daily chart. Source: TradingView
Over the past few days, bears pulled the price below $15 on several occasions, but they could not sustain their lower levels. Consequently, aggressive traders were able to buy the price above the 20-day EMA ($18.91).
This could lead to the pair rising to the 200-day SMA ($24.75). As a result of this assumption, the bears will again try to pull the pair below $15 if the price turns down from the 20-day EMA.
LINK/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows that bulls have pushed the price above the $16.88 overhead resistance. The 20-EMA is turning up and the RSI is in the positive territory, indicating that bulls have a slight edge.
If buyers sustain the price above $16.88, the pair could start an up-move to $20 and then to $23. Conversely, if the price turns down and plummets below $16.88, it will indicate that bears continue to sell on rallies. The pair could then drop to $14.
Helium (HNT) plunged below the 200-day SMA ($26.67) on Jan. 21, but the bears could not sustain the lower levels. The bulls purchased the dip aggressively to $20 and pushed the price back above the 200-day SMA on Jan. 26.
HNT/USDT daily chart. Source: TradingView
The recovery hit a wall at the 20-day EMA ($28.84) and turned down but the bulls did not allow the price to dip below the 200-day SMA. The price has been trading between the moving averages for the past three days.
This tight-range trading is unlikely to continue for long. If bulls drive and sustain the price above the 20-day EMA, the HNT/USDT pair could rally to $36 and then to the downtrend line.
This positive view will invalidate if the price turns down and plummets below the 200-day SMA. That may pull the pair down to $20.
HNT/USDT 4-hour chart. Source: TradingView
The price broke out of the downtrend line, indicating that the bears may be losing their grip. The bears tried to sink the price back below the 20-EMA but the bulls are attempting to defend the support.
The up-move may pick up momentum after bulls drive the price above $31 as that could signal a 1-2-3 bottom. There is a minor resistance at the 200-SMA but once that is cleared, the pair could start its march toward $40. Conversely, if the price turns down and plummets below $26, the pair could drop to $24.
Flow (FLOW) has been in a strong downtrend for the past few months. The bears pulled the price below the strong support at $6 on Jan. 22 but have not been able to build upon their advantage. This indicates accumulation at lower levels.
FLOW/USDT daily chart. Source: TradingView
The bulls pushed the price back above the breakdown level and the 20-day EMA ($6.41) on Jan. 30. If they sustain the price above the resistance level, it will signal a possible change in trend.
The 20-day EMA is flattening out and the RSI has recovered into the positive territory, indicating that bulls are on a comeback.
This positive view will invalidate if the price turns down from the current level and plummets below the $6 support. Such a move will indicate that bears continue to sell aggressively at higher levels.
FLOW/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the price is facing resistance at the 200-SMA. This is a critical level to watch out for because the previous recovery had faltered at this resistance. If the price turns down from the current level, the FLOW/USDT pair could drop to the 20-EMA.
If the price rebounds off this level with strength, it will indicate that bulls are buying on dips. The buyers will then make one more attempt to push the pair above the 200-SMA. If they manage to do that, the pair could rally to the overhead resistance zone at $9.27 to $9.70.
Harmony (ONE) is trading inside a large range between $0.16 and $0.36. The bears recently tried to sink the price below the range but the bulls firmly held their ground.
ONE/USDT daily chart. Source: TradingView
The price has rebounded off the support and the bulls will now try to push the ONE/USDT pair above the 200-day SMA ($0.19). If they succeed, the pair could rise to the 20-day EMA ($0.23) where the bears may again mount a stiff resistance.
A break and close above the 20-day EMA could clear the path for a possible rally to $0.28. Conversely, if the price turns down from the current level, the bears will attempt to pull the pair below $0.16. If they can pull it off, it will signal the possible start of a new downtrend.
ONE/USDT 4-hour chart. Source: TradingView
The 4-hour chart shows the formation of a symmetrical triangle pattern. The 20-EMA has flattened out and the RSI is just below the midpoint indicating a balance between supply and demand.
This indecision could tilt in favor of the bulls if the price rises and sustains above the triangle. That could suggest a possible trend reversal and the pair may rise to $0.22 and later to $0.26.
This positive view will invalidate if the price turns down and plummets below the support line. Such a move will indicate that the triangle acted as a continuation pattern.