Bitcoin and altcoins are showing signs of short-term exhaustion, meaning a few days of consolidation could occur.
Morgan Creek Digital co-founder Anthony Pompliano highlighted data from Santiment, which showed that the 30-day rolling correlation between Bitcoin (BTC) and the S&P 500 is 0. Pomp stressed that the lack of correlation shows that Bitcoin is a store of value.
Along with that, Bitcoin has also outperformed most traditional asset classes such as gold, the S&P 500, crude oil, and the U.S. dollar since the sector wide crash that took place in March when coronavirus fears reached a peak.
Abra Co-founder and CEO Bill Barhydt recently said that “Bitcoin is the single best investment opportunity in the world right now” and he has substantially increased his Bitcoin holdings in the past few days. After the recent purchase, about 50% of Barhydt’s total investment portfolio is now held in Bitcoin.
Is Bitcoin likely to resume its uptrend or will it take a pause and consolidate for a few days before starting the next trending move? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
BTC/USD
The bulls are struggling to propel Bitcoin (BTC) above the $13,200–$13,343.66 resistance zone. This suggests that after the initial frenzy, buying has dried up at higher levels.
BTC/USD daily chart.
The failure to sustain above $13,200 could attract profit booking by the short-term traders that may result in a pullback to the $12,460–$12,050 support zone.
However, the upsloping moving averages and the relative strength index in the overbought territory, shows that the bulls are in command. Therefore, the bulls might buy the dip to the 20-day exponential moving average ($12,034).
If the BTC/USD pair rebounds sharply from the 20-day EMA, the bulls will make one more attempt to resume the uptrend. If they succeed, a rally to $14,000 is likely.
Conversely, if the bears can sink the pair below the 20-day EMA, a fall to the 50-day simple moving average ($11,109) is possible.
ETH/USD
The tight range consolidation of the past three days has resolved the downside. The bears have dragged Ether (ETH) back below $395 but the bulls are attempting to keep the price above the 20-day EMA ($383).
If the ETH/USD pair rebounds off the 20-day EMA and rises above $400, it will suggest strong accumulation at lower levels. A breakout of $420 will signal the possible resumption of the uptrend.
However, the 20-day EMA is flattening out and the RSI is just above the midpoint, which suggests a balance between supply and demand.
If the bears sink the price below the 20-day EMA, it will suggest that the momentum has weakened. A break below the uptrend line may intensify the selling.
XRP/USD
The failure of the bulls to push XRP above the $0.26 resistance in the past few days may have attracted profit booking by the short-term traders. The altcoin has broken below the 20-day EMA ($0.249) and is currently attempting to stay above the 50-day SMA ($0.244).
If the XRP/USD pair rebounds off the 50-day SMA, the bulls will make one more attempt to push the price above $0.26. If they can pull it off, the pair is likely to pick up momentum and rally to $0.30.
On the other hand, if the bears sink the price below the 50-day SMA, the pair could extend its stay inside the $0.2295–$0.26 range for a few more days.
The flattening moving averages and the RSI just below 50 also point to a possible range-bound action in the short-term.
BCH/USD
The failure of the bulls to propel Bitcoin Cash (BCH) above the $280 resistance attracted profit booking by the short-term traders. This selling has dragged the price down to the 20-day EMA ($252).
If the BCH/USD pair rebounds sharply from the 20-day EMA, it will suggest accumulation at lower levels. The bulls will then again try to push the price above the overhead resistance at $280.
If they succeed, the rally may extend to $300 and above it to $326.30. Conversely, if bears sink the price below the 20-day EMA, the BCH/USD pair could drop to $242. Such a move will suggest that the pair could remain range-bound for a few more days.
The RSI has formed a negative divergence, which suggests that the bullish momentum may be weakening.
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