Bitcoin (BTC) is gradually gaining ground on gold, the traditional store of value. Data shows that one ounce of gold can only buy 0.0352 Bitcoin as of Feb. 17, the lowest amount of BTC ever. This shows that Bitcoin has been rewarding its investors much more than gold.
Bitcoin has massively outperformed gold over various time frames. Even if the latest one-year data is considered, Bitcoin’s risk-adjusted return is 270%, while gold's is only 24% as of Dec. 28, 2020.
The result further skews hugely in favor of Bitcoin if longer time frames of four years or eight years are compared.
In the past few years, Bitcoin has matured as an asset class. During the previous bull run in 2017, Bitcoin’s 60-day volatility was at 32%. But in the current bull phase, Bitcoin has recorded lower volatility at 14.25%. Analysts believe that as institutional adoption increases, volatility could drop further.
And there are no signs of a slowdown in the number of institutions showing interest in Bitcoin. Elliptic co-founder Tom Robinson told The Telegraph that many United States financial institutions “are seriously considering launching some type of cryptocurrency service.”
If institutional adoption continues to grow, the sentiment is likely to remain positive. Let’s analyze the charts of the top 10 cryptocurrencies to spot the levels on the upside that may act as significant resistance.
The psychological level at $50,000 saw only minor resistance to Bitcoin, which shows that the bulls are firmly in command and not hurrying to book profits, as they anticipate the bull run to continue.
A new all-time high above $51,000 is a sign of strength. The upsloping 20-day exponential moving average ($43,451) and the relative strength index (RSI) in the overbought zone suggest bulls are in control.
If the bulls can sustain the price above $50,000 for three days, the BTC/USD pair could rally to $60,974.43 where the bears may step in.
On the downside, the first support is the 20-day EMA, and if the bears can sink the price below it, the decline could extend to the 50-day simple moving average ($37,415). This is an important level to watch because a break below it will suggest a momentum shift to the bears.
Ether (ETH) is currently range-bound between $1,658.572 and $1,869.473. The long tail on the Feb. 15 candlestick shows the bulls are buying on every minor dip. The buyers will now try to propel the price above $1,869.473.
If they succeed, the ETH/USD pair could start the next leg of the uptrend, which has a target objective of $2,000. This is an important resistance, but if the bulls can drive the price above the channel, the momentum could accelerate. The next target objective on the upside is $2,515.
Contrary to this assumption, if the price fails to rise above $1,869.473, the pair may consolidate in the range for a few more days. A break below the 20-day EMA ($1,658) will be the first sign of weakness, and a trend change will be signaled if the bears sink the price below the support line of the channel.
Polkadot's DOT rose to a new all-time high on Feb. 16 and followed it up with another new high on Wednesda, which shows that the bulls are firmly in command. However, the bears are defending the resistance line of the channel.
If the bulls can thrust the price above the ascending channel, the momentum could pick up and the DOT/USD pair could rally to $42. On the other hand, even if the price sustains in the upper half of the channel, the uptrend may gradually continue.
The first sign of weakening momentum will be a break below the midpoint of the channel. If that happens, the pair may decline to the support line of the channel. This is an important support level because a break below it could indicate a trend change.
After the sharp rebound from the lows on Feb. 15, Cardano's ADA formed an inside day candlestick pattern on Feb. 16 and a Doji candlestick pattern today, which shows a balance between supply and demand.
The bulls will now try to push the price to $0.9817712. This level is likely to act as a stiff resistance, but if the bulls can drive the price above it, the ADA/USD pair could rally to $1.25 and then to $1.50.
On the other hand, if the price turns down from the current level or the overhead resistance, the pair may drop to $0.687. A bounce off this level could keep the price range-bound between $0.687 and $0.981.
XRP price attempted to bounce off $0.50 on Feb. 14 and 15, as seen from the long tails on the candlestick, but the bulls could not sustain the rebound. This suggests that demand dries up at higher levels.
The failure to achieve a strong rebound off a critical level suggests the momentum has weakened. The XRP/USD pair could now consolidate between $0.50 and $0.65 for a few days. A breakout of $0.65 could push the price to $0.78068.
Contrary to this assumption, if the price dips and breaks below the 20-day EMA ($0.48), the pair may decline to the 50-day SMA ($0.35).
Binance Coin (BNB) broke out of the $117.7289–$141.32 range it had been stuck in for the past few days. The momentum picked up today, and the buyers easily propelled the price above the all-time high at $148.40.
A breakout to a new all-time high after a shallow correction shows that traders are buying on every minor dip and not waiting for a deeper correction to get in. The BNB/USD pair could now rally to $200.
However, traders should keep an eye on the RSI, as it has been trading in the deeply overbought levels for the past few days. This suggests that the pair remains vulnerable to a correction or further consolidation.
The first sign of weakness will be a break below $141.32, and the trend may favor the bears if the $117.7289 support cracks.
Litecoin (LTC) completed a successful retest of the $185.5821 level on Feb. 15, and the bulls are now attempting to resume the uptrend by pushing and sustaining the price above $230.5305. If they manage to do that, the altcoin could rally to $256 and then $272.
The upsloping moving averages and the RSI in the overbought zone indicate that bulls are in command. However, if the bears defend the overhead resistance, the LTC/USD pair may consolidate between $185 and $230 for a few days
This positive view will be invalidated if the pair turns down and breaks below $185.5821. Such a move would suggest that the supply exceeds demand. The next support on the downside is the 50-day SMA ($156).
Bitcoin Cash (BCH) formed a long-legged Doji candlestick pattern on Feb. 15 and an inside day candlestick pattern on Feb. 16. Both these formations indicate indecision among traders about the next directional move.
If the uncertainty resolves to the upside and the bulls drive the price above the $745.39–$773.32 overhead resistance zone, the BCH/USD pair could resume the uptrend and rally to $900. The upsloping moving averages and the RSI in the overbought territory suggest that the path of least resistance is to the upside.
Conversely, if the price turns down and slips below $670, the next stop could be the breakout level at $631.71. If this support also cracks, the decline may extend to the 20-day EMA ($563).
Chainlink's LINK recovered sharply from the intraday lows on Feb. 15, but the bulls could not build upon the strength and push the price above the resistance line of the ascending channel. This attracted profit-booking from short-term traders, and that pulled the price down to the midpoint of the channel.
The long tail on today’s candlestick shows the bulls are buying on dips. If they can sustain the recovery, the price may again rise to the resistance line of the channel. A break above the channel may start the journey toward the next target objective at $44.
On the contrary, if the price again turns down from the resistance line, the LINK/USD pair may continue its journey inside the channel. A breakdown and close below the channel would tilt the advantage in favor of the bears.
Stellar's Lumen (XLM) also formed an inside day candlestick pattern on Feb. 16, which shows indecision among the bulls and the bears. The bulls are currently attempting to push the price above $0.517.
If they succeed, it will suggest that demand exceeds supply, and that could result in a retest of $0.600681. A breakout of this resistance will indicate the resumption of the uptrend. The rising moving averages and the RSI near the overbought zone suggest that bulls have the upper hand.
Contrary to this assumption, if the price turns down from the current level and slips below $0.409, it will suggest weakness and open the doors for a possible drop to $0.35 and then to the 50-day SMA ($0.31).
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.