Strong institutional demand has propelled Bitcoin and many altcoins to new all-time highs.
Bitcoin (BTC) broke out to a new all-time high today, buoyed by the news that Tesla has purchased $1.5 billion worth of Bitcoin, according to a filing with the Securities and Exchange Commission.
In addition to the Bitcoin purchase, Tesla also plans to offer its customers the option of buying products with BTC. Instead of converting BTC payments to fiat upon receipt, Tesla may decide to add it to its reserves.
In addition to Tesla’s purchase, legendary investor Bill Miller also plans to increase his exposure to Bitcoin by investing over $300 million in Grayscale Bitcoin Trust. These purchases by large investors even after Bitcoin’s sharp rally show they expect the up-move to continue further.
Mexico’s third-richest person Ricardo Salinas Pliego has added the hashtag Bitcoin to his Twitter bio. This act by Salinas brings Bitcoin to the notice of his 840,000 followers, some of whom may want to emulate the billionaire by buying Bitcoin. Salinas had revealed back in November that 10% of his “liquid portfolio” was invested in Bitcoin.
These developments have given a positive boost to the fundamentals in the crypto sector. With a huge tailwind in place, let’s analyze the charts of the top-10 cryptocurrencies to arrive at the possible target levels on the upside.
Bitcoin had been stuck between $38,000 and $40,000 for the past two days. The long wick on Feb. 6 candlestick showed traders booked profits at higher levels and the long tail on Feb. 7 candlestick signaled buying on dips.
Today, the bulls have propelled the price above the $41,959.63 overhead resistance. This opens the possibility of a rally to the immediate target objective at $50,000 where the bears may again mount a stiff resistance.
But if the bulls can drive the price above $50,000, the BTC/USD pair may rally to $60,974.43.
Contrary to this assumption, if the bulls fail to sustain the breakout, it will indicate that traders are booking profits at higher levels. The bears will then try to pull the price back below $38,000.
If they succeed, a retest of the moving averages is likely. A break below the 20-day exponential moving average ($36,196) will be the first sign of weakness and a drop below the 50-day simple moving average ($33,250) will increase the likelihood of a deeper correction.
Ether (ETH) turned down from $1,757.338 on Feb. 5 but the bulls aggressively purchased the dip to the breakout level at $1,474.096 on Feb. 7 as seen from the long tail on the day’s candlestick.
The upsloping moving averages and the RSI in the positive territory suggest that the path of least resistance is to the upside.
If the bulls can sustain the price above $1,757.338, the ETH/USD pair could resume its uptrend. The next target on the upside is $1,870 and if this level is crossed, the up-move may reach the psychologically critical level at $2,000.
On the contrary, if the price turns down from the current level, the pair could consolidate between $1,757.338 and $1,473.096 for a few more days. A break below $1,473.096 could pull the price down to the 50-day SMA ($1,148).
Cardano (ADA) picked up momentum after breaking above the ascending channel on Feb. 5. The bulls easily pushed the price above the immediate resistance at $0.60 on Feb. 6, which opens the possibility of a rally to $0.80.
Although the rising moving averages suggest advantage to the bulls, the RSI in the overbought territory warns of a possible correction or consolidation in the near term.
A consolidation will indicate that traders are not booking profits in a hurry and that will enhance the prospects of the resumption of the uptrend.
On the other hand, a correction could reach the 20-day EMA ($0.454). A strong rebound off it will suggest that the uptrend remains intact, while a break below it will suggest the momentum has weakened.
XRP has been sustaining above $0.3850 for the past few days, but the bulls are struggling to push the price above $0.50. This suggests that demand dries up at higher levels.
The bears tried to sink the price below the $0.3855 support on Feb. 7 but failed. This shows the bulls are buying the dips. When bears sell on rallies and bulls buy on dips, the price gets stuck in a range.
A break and close above $0.50 could start an up-move that could reach $0.65, while a break below the 20-day EMA ($0.374) could sink the XRP/USD pair to the 50-day SMA ($0.312).
The failure of the bears to sink and sustain the price below $19.40 has attracted strong buying from the bulls. This has propelled Polkadot (DOT) to a new all-time high today.
The immediate target on the upside is $24.08 and if this level is crossed, the uptrend may extend to $30. Both moving averages are sloping up and the RSI is near the overbought territory, indicating that the bulls are in control.
This positive view will invalidate if the DOT/USD pair reverses direction and breaks below the 20-day EMA ($17.91). Such a move could pull the price down to the next support at $14.7259.
Binance Coin (BNB) soared above the resistance line of the broadening wedge pattern on Feb. 5, which invalidated the bearish setup. The bears are trying to stall the current uptrend at $75, but the positive sign is that the bulls have not given up much ground.
After a shallow correction on Feb. 7, the bulls are currently attempting to resume the uptrend. A breakout and close above $75.5 could propel the BNB/USD pair to $95 and then to $100.
On the contrary, if the price again turns down from $75.5, the bears will try to sink the pair back into the wedge. If they succeed, it will suggest profit booking at higher levels.
Litecoin (LTC) had been consolidating between the 20-day EMA ($144.98) and $160 for the past few days. The bulls are currently attempting to resolve this tight trading range to the upside. If they manage a close above $160, the altcoin could rise to $185.5821.
If the bulls can propel the price above $185.5821, the LTC/USD pair could resume the uptrend and rally to $200. Contrary to this assumption, if the price turns down from the overhead resistance, the pair could again dip to the 20-day EMA.
A breakdown and close below the moving averages will be the first sign of weakness. Such a move could pull the price down to $120.
Dogecoin’s pump on Jan. 28 and 29 met with strong selling at $0.0875. Although the altcoin dropped on Jan. 30, the bears could not capitalize on this weakness. Strong buying at lower levels again resumed the up-move on Feb. 4 when the price broke and closed above the psychological barrier at $0.050.
The DOGE/USD pair turned down from the $0.0875 overhead resistance on Feb. 7, but the long tail on today’s candlestick suggests that bulls are accumulating on dips. If buyers can drive the price above $0.0875, the momentum could pick up.
The next target to watch on the upside is $0.102412 and then $0.13. Contrary to this assumption, if the price turns down from $0.875, the pair may consolidate in a range for a few days before starting the next trending move.
The long tail on the Feb. 7 candlestick shows the bulls purchased the dip to the 20-day EMA ($23.15). If buyers can now drive Chainlink (LINK) above the $25.7824 to $27 overhead resistance zone, the uptrend could resume.
The first target on the upside is $30 and if the bulls can thrust the price above it, the LINK/USD pair could rally to $33. The upsloping moving averages and the RSI in the positive territory suggest advantage to the bulls.
Contrary to this assumption, if the price turns down from the overhead resistance, the bears will once again try to sink the price below the 20-day EMA. If they succeed, the pair could slide to $20.1111.
Bitcoin Cash (BCH) broke above the $465.02 resistance on Feb. 6 but the bulls could not sustain the breakout. This attracted profit-booking and the altcoin slipped below the 20-day EMA ($439) on Feb. 7.
However, the bears could not capitalize on the weakness on Feb. 7 and sink the price below the 50-day SMA ($422). The bulls have currently again pushed the price above $465.02. This increases the likelihood of a rally to $515.
Contrary to this assumption, if the BCH/USD pair turns down from the current levels and breaks below the 50-day SMA, it will signal weakness.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.