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bitcoin (BTC) gained around 40% in January, its best showing in the first month of the year since 2013. The strong rally prompted a shift in sentiment and futures markets, which saw deportation in November and December,started negotiate at a healthy contango in January, according to Glassnode.
Coming out of a bear market low, a rally driven by the leaders rather than the laggards is a sign that the bottoming process may have begun. The rise in Bitcoin’s dominance of around 38% in November to over 42% in January is an indication that smart investors may have started accumulating Bitcoin at lower levels.
After January’s strong rally, the next big question is how Bitcoin will perform in February. Data from Coinglass shows that since 2013, Bitcoin closed February in the red only in 2014 and 2020. If history repeats itself, the possibility of a positive February close is high, but the pace of the rally could slow.
Could Bitcoin and altcoins remain constrained and consolidate gains or will traders take profits, driving prices lower? Let’s study the charts of the top 10 cryptocurrencies to find out.
BTC/USDT
Bitcoin fell below the $22,800 breakout level on January 30, but the bulls bought at lower levels and pushed the price back above $23,000 on January 31.
The ascending moving averages and the Relative Strength Index (RSI) near the overbought zone suggest that the bulls are under control. Even if the price slips below $22,800, the BTC/USDT pair is likely to find support at the 20-day exponential moving average ($21,936).
A strong rebound from the current level or the 20-day EMA could once again launch the pair towards the general resistance at $24,000.
A break and close below the 20-day EMA could be the first sign that the bulls may be rushing for the exit. There is minor support at $21,480 but if that gives way, the pair could retest the psychologically critical $20,000 level.
ETH/USDT
Ether (ETH) came off the 20-day EMA ($1,546) on January 31, but the bounce lacks strength. This suggests a lack of aggressive buying by the bulls.
The bears will attempt to shift the advantage in their favor by pulling the price below the 20-day EMA and strong support at $1,500. If successful, the ETH/USDT pair could move back to the important support at $1,352. A strong rebound from this level could signal limited action between $1,352 and $1,680 for some time.
If the bulls want to maintain their dominance, they will have to fiercely defend the 20-day EMA and catapult the price above $1,680. If they do, the pair could hit $1,800 and possibly $2,000.
BNB/USDT
BNB (BNB) formed a candlestick pattern inside the day on January 31, indicating indecision among bulls and bears.
If the price drops below the 20-day EMA ($300), the short-term advantage could tip in favor of the bears. The BNB/USDT pair could then dip to $280 and then to the 50-day SMA ($273). Buyers should defend this area vigorously.
On the upside, the bulls will need to overcome the hard barrier at $318 to gain the upper hand. There is no major resistance between $318 and $360, so the pair can cover this distance in a short time.
XRP/USDT
XRP (XRP) fell below the 20-day EMA ($0.40) on January 30, but the bears were unable to sustain the lower levels. This suggests that the bulls are buying on the dips.
The 20-day EMA is flattening out and the RSI is just above the midpoint, indicating limited short-term action. If the price breaks below the 20-day EMA, the XRP/USDT pair could fall to the 50-day SMA ($0.37), which could be strong support. The pair could then attempt a rally towards the overhead area of $0.42 to $0.44
If the buyers want to gain the upper hand, they will need to drive the price above the overhead resistance. The pair could then accelerate and rise to $0.51 and then to $0.55.
ADA/USDT
Cardoon (ADA) broke out of the 20-day EMA ($0.36) on January 31, but the bulls were unable to breach the barrier at $0.40. This suggests that the bulls may be tired.
The bears will attempt to strengthen their position by dragging the price below the 20-day EMA support. If they succeed, the ADA/USDT pair could enter a short-term corrective phase. There is minor support at $0.32 but if it fails, the next support is at $0.30.
The 20-day EMA has not been breached since January 4th, which is why the bulls will do all they can to defend it. If the price rises from the 20-day EMA and breaks above $0.40, this will indicate that the upside may continue for some time. The pair could then rally to $0.44.
DOGE/USDT
Dogecoin (DOGE) broke through the $0.09 resistance and climbed near $0.10 on January 31. This is a positive sign, but the bears are in no mood to surrender. The sellers pulled the price to $0.09 on February 1.
The 20-day EMA ($0.09) is an important level to watch. If the price bounces off this level with strength, it will suggest that sentiment remains positive and traders are buying lower. This could improve the outlook for a rally to $0.11, where the bears could once again pose a big challenge.
Contrary to this assumption, if the price continues to fall and dips below the 20-day EMA, the pair could slide towards the 50-day SMA ($0.08) and later down to $0.07.
MATIC/USDT
Polygon (MATIC) Shallow rebound from the $1.05 breakout level on January 30 shows weak demand at lower levels. The bears will try to pull the price towards the 20-day EMA ($1.03).
If the buyers want the upward move to remain intact, they will need to defend the 20-day EMA. If the price rises above $1.13, buying may resume and the MATIC/USDT pair may attempt a rally to $1.30.
On the contrary, if the price dips below the 20-day EMA, it could trap several aggressive bulls that may have long since topped $1.05. This could lead to a long sell-off and the pair could fall to the 50-day SMA ($0.90).
Related: Bitcoin Advocate Najah Roberts Explains Why BTC is a Tool for Empowerment
LTC/USDT
Litecoin (SLD) bounced off the 20-day EMA ($88) on January 30, indicating that the uptrend remains intact and the lower levels are attracting buyers.
The 20-day EMA sloping upwards and the RSI in the positive zone indicates an advantage for buyers. The LTC/USDT pair might first hit $100, where the bears might once again mount strong resistance. If the bulls don’t give much ground from this level, the pair could continue its march north towards $107.
The first sign of weakness will be a breakout and a close below the 20-day EMA. This could indicate profit booking by short-term traders. The pair could then slide to $81.
DOT/USDT
Although the bulls pushed Polkadot (POINT) above the resistance line on several occasions over the past few days, they were unable to sustain the higher levels. This shows that the bears fiercely defend this level.
The sellers will try to increase their dominance by pulling the price below the 20-day EMA ($6.04) while the bulls will try to protect the support. If the bears come out on top, the DOT/USDT pair could start a deeper correction to $5.50 and then to the 50-day SMA ($5.24).
In the event that the bulls successfully defend the 20-day EMA, it may increase the likelihood of a rally above the overhead resistance at $6.84. The pair could then accelerate towards $8 with a brief stop at $7.42.
AVAX/USDT
Avalanche (AVAX) fell from the horizontal resistance at $22 on January 28 and fell to the breakout level of the resistance line on February 1.
The 20-day EMA ($17.87) is just below the resistance line, so it is likely to act as strong support. If the price bounces off this support zone, it will indicate that sentiment is positive and traders are buying on dips. The bulls will then attempt to push the AVAX/USDT pair above $22 and begin a rally towards $30.
The bears probably have other plans. They will try to pull the price below the 20-day EMA. If they do, the pair could slide towards the 50-day SMA ($14.41).
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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