BTC/USDT day-to-day chart. Source: TradingView.
While a parabolic rally supplies outsized returns within a short time, it likewise increases the possibility of a sharp turnaround that may capture many traders off guard since after such a strong up-move, the cost might backtrack anywhere in between 62% to 79% of the entire rally.
If that happens, the BTC/USD set could drop to the $20,000 mark, or a drop of over 30%, which at the minute looks inconceivable.
In a melt-up, it is hard to predict the level where the rally might end due to the fact that traders continue to chase rates higher due to FOMO. The next technical level which might serve as a resistance is $37,000.
Shorting a rally because it is overbought on all time frames might be a losing proposal because, during a blowoff top, the cost might continue to stay overbought for a lot longer than a lot of traders anticipate.
But traders who own long positions should utilize appropriate danger management concepts to safeguard their paper earnings and not get carried away by greed.
ETH/USDT daily chart. Source: TradingView.
The bulls quickly propelled the cost above the $840.93 to $900 resistance today. The next resistance on the upside is $1,000. The bulls will try to safeguard the $840.93 breakout level if the rate turns down from this level.
If that takes place and the ETH/USD pair rebounds off this assistance, the bulls will once again attempt to resume the up-move. On the other hand, if the bears sink the cost back listed below $840.93, a drop to the 20-day EMA ($ 700) is possible.
A break below this level might be an indicator that the pair might have peaked in the short-term.
Crypto market data daily view. Source: Coin360.
This buying will require to sustain to keep the uptrend undamaged due to the fact that if the rally stalls, some institutional financiers and momentum traders who have actually acquired at lower levels might be tempted to book revenues.
If that happens, it might pull the price down rapidly and turn the recent purchases by financiers into a loss, leading to a rush to the exit. Traders should be mindful and employ appropriate danger management strategies to protect their paper profits.
Lets look at the charts of top-five cryptocurrencies that could extend their up-move if the belief remains bullish.
Bitcoin broke above the $30,000 overhead resistance on Jan. 2 and chose up momentum, which could have been due to a brief capture and continued purchasing from the momentum traders.
DOT/USDT day-to-day chart. Source: TradingView.
The DOT/USD set closed in the red on Jan. 1 but the bulls made a strong comeback on Jan. 2. This reveals that the traders are not awaiting a deeper correction to purchase as they expect the prices to rally further.
If the bulls can propel the cost above the $9.50 to $9.89 overhead resistance zone, the uptrend might resume with the next likely target at $12.29.
However, if the price turns down from the overhead resistance, the pair could remain range-bound for a few more days. The pair might lose its bullish momentum if the price slides and sustains below the $7.89 assistance.
BNB/USDT daily chart. Source: TradingView.
The next target on the upside is $46 and then $50. This zone is likely to serve as a stiff resistance.
The current breakout is facing earnings booking above $40. The BNB/USD set might stay range-bound in between $36 and $40 for a couple of more days if the bulls fail to sustain the rate above $40.
A break below the 20-day EMA ($ 34.99) will suggest that the bullish belief has damaged and traders have actually begun booking revenues.
Such a move will recommend that traders may be booking earnings after the sharp rally. The bulls quickly moved the rate above the $840.93 to $900 resistance today. If the rate turns down from this level, the bulls will attempt to protect the $840.93 breakout level.
The 4-hour chart reveals that the bulls are buying on dips to the 20-EMA. The upsloping moving averages and the RSI in the positive zone recommend that bulls have the upper hand.
UNI/USDT everyday chart. Source: TradingView.
The upsloping 20-day EMA ($ 4.06) and the RSI above 67 recommend that the path of least resistance is to the advantage. The UNI/USD pair might extend the uptrend and rally to $7.50 and then to $8.60 if the bulls can drive the price above $5.60.
Contrary to this presumption, if the cost once again rejects from $5.60, the set might stay range-bound in between $4.50 and $5.60 for a few days. The favorable view will be refuted if the bears sink the price listed below the $4 support.
Title: Top 5 cryptocurrencies to view today: BTC, ETH, DOT, BNB, UNI.
Sourced From: cointelegraph.com/news/top-5-cryptocurrencies-to-watch-this-week-btc-eth-dot-bnb-uni.
Published Date: Sun, 03 Jan 2021 18:00:00 +0000.
ETH/USDT 4-hour chart. Source: TradingView.
The 4-hour chart shows that the momentum got after the bulls pressed the rate above the $840.93 resistance. The latest leg of the rally has pressed the RSI deep into the overbought zone, suggesting that a small correction or debt consolidation might be around the corner.
The wick on the most recent candlestick suggests profit-booking by traders near $975, but if the bulls do not give up much ground and the pair rebounds off $900, it will increase the possibility of a break above $1,000.
If the pair turns down and breaks listed below the $840.93 assistance and the 50-SMA, this bullish view will be revoked.
Polkadot (DOT) is presently consolidating in a strong uptrend. The bears are attempting to defend the $9.50 overhead resistance while the bulls are buying on dips to the $7.89 assistance.
UNI/USDT 4-hour chart. Source: TradingView.
The 4-hour chart reveals that the cost has broken out of the balanced triangle. The pair might start its journey to the pattern target at $6 if the bulls can sustain the breakout.
On the contrary, if the cost slips back into the triangle, it might drop to the 20-EMA. When again attempt to resume the up-move, a strong rebound off this assistance will show accumulation at lower levels and the bulls will.
This favorable view will be invalidated if the pair rejects from the present levels and breaks below the triangle.
DOT/USDT 4-hour chart. Source: TradingView.
The 4-hour chart shows that the bulls are buying on dips to the 20-EMA. This recommends that the belief stays positive. The upsloping moving averages and the RSI in the favorable zone recommend that bulls have the upper hand.
If the bulls can sustain the rate and press above $9.50 for four hours, the next leg of the uptrend could begin.
If the rate again turns down from the overhead resistance, the bears will attempt to sink the price listed below the 20-EMA. The momentum might damage and the pair might remain range-bound between $7.89 to $9.50 for a couple of days if they prosper.
Binance Coin (BNB) resumed its uptrend today when the bulls pressed the price to a new all-time high at $41.5372. The upsloping moving averages and the RSI in the overbought zone recommend that bulls are in control.
BNB/USDT 4-hour chart. Source: TradingView.
The 4-hour chart shows that the bears are offering aggressively above the $41 levels, as seen from the long wicks on the latest two candlesticks.
It could find support at the 20-day EMA if the price dips back listed below $40. A strong rebound off this level will suggest need at lower levels and the bulls may again attempt to resume the uptrend.
Conversely, if the bears sink the cost below the moving averages, it will suggest a possible change in the short-term trend.
Uniswap (UNI) broke out of the $2.90 to $4 tight debt consolidation on Dec. 30 and rose to $5.29 on Dec. 31. The bears are currently attempting to stall the up-move at the $5.60 resistance however the favorable indication is that the bulls have actually not quit much ground.
Bitcoin (BTC) has regularly been hitting brand-new all-time highs over the weekend, however the most recent surge has actually also created a brand-new high versus gold, according to MarketWatch data. This recommends that Bitcoin has actually been acquiring approval as the brand-new shop of value and that may attract more clients away from gold into Bitcoin..
Analysts suggest that the current rally above $30,000 might have been set off by aggressive purchasing from institutional investors on Coinbase, as recommended by the big premium of about $350 compared to the rate in Binance.
With the current rally, Bitcoin hit a market capitalization of over $640 billion today, simply shy of Alibaba, the ninth-largest business in terms of market cap, at $649.31 billion. Meanwhile, breaking $30,000 might be developing FOMO amongst institutional financiers who have actually missed buying Bitcoin at lower levels.
BTC/USDT 4-hour chart. Source: TradingView.
The 4-hour chart reveals that the bulls are purchasing on dips to the 20-exponential moving average. The bears have not had the ability to break the 50-simple moving average support given that the price broke above $20,000.
Therefore, the first indication of weak point will be a break below the 20-EMA. Such a move will recommend that traders may be booking revenues after the sharp rally. A deeper correction listed below the 50-SMA might signal a possible change in trend.
There is a major resistance at $37,000 however if that is crossed, the rally could reach $40,000, which could once again act as a stiff resistance.
Ether (ETH) resumed its uptrend after a two-day small correction on Jan. 2 and has actually followed it up with another strong up-move today. The upsloping moving averages and the RSI in the overbought territory recommend that the bulls are in command.